Opinion of the Economic and Social Committee on 'Preventing new barriers from arising in the single market (Single Market Observatory)'
C 157/36 EN Official Journal of the European Communities 25. 5. 98 Opinion of the Economic and Social Committee on ‘Preventing new barriers from arising in the single market (Single Market Observatory)’ (98/C 157/11) On 10 July 1997 the Economic and Social Committee decided, in accordance with Rule 23(3) of its Rules of Procedure, to draw up an opinion on ‘Preventing new barriers from arising in the single market’. The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 4 March 1998. The rapporteur was Mr Vever. At its 353rd plenary session (meeting of 25 March 1998) the Economic and Social Committee adopted the following opinion by 76 votes to seven with six abstentions. 1. Introduction 1. 1. The European Union is currently engaged, at the Commission’s initiative, in an action plan to round off the completion of the single market by the end of 1998. This action plan corresponds in its spirit and timetable to the wish expressed by the ESC itself from 1995 onwards that a new impetus be given to work which was tending to mark time, and that decisive progress be made in the single market, as required for the introduction of the euro. 1. 2. Vigorously supporting the action plan, the ESC pointed out after a hearing on 5 March 1997 that it would not be enough to adopt the final EU directives which were still lacking, in order to ensure the free movement of people, products, services and capital. A decisive factor for the lasting operation of the single market would be finding ways of preventing at source the creation of new barriers fed by a constantly increasing flow of new national regulations. Despite the directives already adopted and very real progress achieved in the liberalization of intra-Community trade, it still remains much easier to create a new barrier in the single market than to prevent it upstream or to reabsorb it subsequently at Community level. 1. 3. In issuing an own-initiative opinion on pre- venting new barriers within the single market, the ESC wishes to draw the attention of the Community institutions and the Member States to this essential aspect of completion of the single market which has so far been neglected. The success of the action plan will depend to a large extent on the importance given to means of remedying at source the excessive creation of new barriers, in an effective and lasting way. 2. Legal position governing national regulations 2. 1. The operation of the single market is intended to reconcile freedom of establishment and movement on the one hand, and social protection, health protection and protection of the consumer and the environment on the other, involving a sharing of powers among Community, national and possibly regional levels. The arrangements are based on four essential elements: an obligation in principle to eliminate national restrictions on trade, approximation of national laws in the fields necessary to the operation of the single market, mutual recognition of national provisions to allow freedom of movement, and prior notification of national regulation plans which may affect the single market (to which is added a possibility of subsequent monitoring). 2. 2. Articles 30 to 36 of the Treaty require the Member States to eliminate all quantitative restrictions on imports and measures with equivalent effect, unless there are imperative reasons for maintaining restrictive national provisions. These imperative reasons, for exam- ple the need to protect consumers or the environment, must not constitute a means of arbitrary discrimination nor a disguised restriction on trade between Member States. They must be reasoned and proportionate, and monitored by the Commission and the Court of Justice. The ‘Cassis de Dijon’ case well illustrates that freedom of movement must remain the rule and national restrictions the exception. However, the Member States currently tend to legislate particularly actively in the field covered by Article 36. 2. 3. In order to promote a minimum degree of convergence in these national legislative, regulatory and administrative provisions, the European Union adopts, as the need arises, specific measures to assist the establishment and functioning of the single market (Article 100a). The bulk of the regulations on approxi- mation of Member State provisions with regard to the single market are based on this provision, subject to a majority procedure in the Council acting in co-decision with the Parliament (except for the provisions on taxation and the free movement of persons). These common regulations are designed to achieve, in the Treaty’s words, a ‘high level of protection’ with regard 25. 5. 98 EN Official Journal of the European Communities C 157/37 to health, safety, environmental protection and con- sumer protection, but still allow the Member States a frequently substantial degree of latitude to adopt complementary measures, which may tend, in the absence of adequate monitoring, to fragment the single market once again. The European Union, moreover, is seeking to 2. 4. develop mechanisms to ensure the equivalence of measures applied in the Member States, making possible mutual recognition which maintains free movement within the single market even in the absence of harmon- ization or where harmonization is only partial (Article 100b); but these mechanisms are still a long way from being applied simply and effectively by all the Member States. To ensure transparency and monitoring of Mem- 2. 5. ber State initiatives which can affect the operation of the single market, Directive 83/189 introduced a prior notification procedure which was supplemented on 1 January 1997 (Decision No 3052/95) by an obligation to notify individual measures which could be a barrier to mutual recognition; the procedure now covers all agricultural and industrial products. This obliges each Member State to inform the European Commission, and through it the other Member States, of technical regulation plans which can affect the operation of the single market. It lays down a three-month reflection period before any implementation, to allow the Com- mission, which can receive comments from the other Member States and consult the industrial sectors con- cerned, to examine these measures, and if necessary to take initiatives with regard to them (request for extension of the reflection period from three to six months, request for amendment of notified plans, possible reasoned opinion starting an infringement procedure). 2. 6. The Commission can thus verify the effects of the measures notified on the operation of the single market, whether they meet the Community rules — Treaty and implementing rules — their merits and their proportionality when they create barriers. The European Court of Justice also considered that enterprises and individuals can use an absence of prior notification as a justification for not applying a new national technical rule. Overall, this prior information and monitoring procedure is operating, but the rise in the number of notifications indicates that much remains to be done to impose better discipline on the Member States. Moreover, the procedure remains currently limited to draft rules on products rather than services, although the Commission has presented proposals for extending it to information society services. These proposals were approved by the ESC and are being adopted elsewhere. 2. 7. In addition, the Treaty has provided for a possibility of subsequent monitoring not only by the Commission but also by the various Member States, allowing for an infringement action to be brought. But this procedure seems to have given rise to hardly any actions in practice. 2. 8. Finally, the procedures on the free movement of persons relate only partly to Community procedures. They also concern — for certain political, security and legal aspects and for questions concerning third country nationals — the operation of the ‘third pillar’ set up by the Maastricht Treaty and subject to special intergovern- mental cooperation procedures. However, the new Treaty of Amsterdam seeks in this field to strengthen links between Community and intergovernmental responsibilities, under conditions allowing more shared responsibility and further progress. Because of this, questions relating to free movement of persons are mentioned in this opinion only for the sake of complete- ness. They will need to be the subject of more thorough consideration by the ESC in a wider framework. 3. Recent developments in national regulations 3. 1. In the first place, there has been a significant increase in national regulations which may create new barriers. Annual notifications have risen from a rate of about 350 in the early years of application of the Directive 83/189 procedure to about 450 in subsequent years, and reached the record figure of 900 for 1997. Even allowing for the fact that this figure includes the exceptional case of 230 delayed Dutch notifications brought forward, the 670 remaining notifications for 1997 show a considerable increase (40 %) in one year. This certainly shows that the procedure is working and that the Member States are meeting their notification obligations. However, it also reveals a proliferation of draft national regulations which places a heavy monitoring workload on the European Commission, involving not only DG XV and DG III, but the other DGs concerned with technical aspects. 3. 2. One aggravating factor is that these new national initiatives have been concentrated in recent years mainly (90 % of them) in supposedly harmonized fields. These are mainly telecommunications, agri-food products, the building and public works sector, mechanical construc- tion and transport. The technical rules concerned relate mainly to health, safety and security, consumer protec- tion and the environment. This can be explained in a C 157/38 EN Official Journal of the European Communities 25. 5. 98 number of ways. On the one hand, they are sectors and fields where public authority has more reason than elsewhere to lay down rules, whether at Community or national level. Moreover, insofar as Community rules concentrate on ‘essential requirements’, national rules have been allowed scope for other details. If the Commission ensures that, in the health and safety field, these essential requirements constitute both minimum and maximum requirements, the Member States are sometimes tempted to consider that they can still add further complementary requirements, while retaining in the fields of consumer protection or environmental protection real margins of manoeuvre to issue rules which go beyond these common requirements. Apart 3. 3. from the persisting entanglement of national technical rules, one must also mention the development of national or indeed regional markings and labels which, without having a binding legal effect, can also create barriers to free marketing on the single market scale. The mutual recognition of national certificates is also sometimes hindered by some buyers who continue to demand in practice that national certificates are obtained. Community rules, which have decreased considerably over recent years. This reduction in Community rules can be explained in two ways. Firstly, most of the directives necessary to the operation of the single market were adopted earlier, with the 1992 programme. Secondly, the stress placed in recent years on the objective of alleviating Community rules, particularly in the Molitor Report’s recommendations, has led the European Commission to realign its proposals (‘better legislation’ approach) and to present fewer new pro- posals than in the past. 3. 7. The situation is thus clearly unbalanced in quantitative terms. In the period from 1992 to 1994, the Member States adopted 1 346 national rules, while the Community itself adopted only 116 rules. Paradoxically, the Member States which most vigorously campaigned for limited Community rules, such as Britain, Germany, France, are those which have notified the largest number of new national drafts. Moreover, while Community rules tend to be deregulatory, since they seek to transform 15 disparate provisions into a single regulation, national rules essentially only add new measures without abol- ishing any earlier ones (even if these measures may also be justified for the citizen or the consumer in a given context). 3. 4. The Commission’s analysis of the notifications shows that one third called for no comment on its part, while one third led to minor comments and one third to more lengthy comments, with the Commission asking for an extension from three to six months of the reflection period before implementation of the notified plan. In total, one notification out of every two posed a real problem — more or less serious — in terms of Community law. In the overwhelming majority of cases Member States complied with the Commission’s comments requesting amendment of the draft or at least a clause providing for mutual recognition of products imported from another Member State. It should also be noted that the Member States 3. 5. themselves have acquired, through this notification procedure, the option of monitoring one another and that they are to send the Commission reasoned opinions on the initiatives which appear to them to cause problems. They are thus called upon to exercise a kind of collective, shared monitoring, which they do effectively because they intervene about as frequently as the European Commission itself; this clearly shows the usefulness of the procedure. 4. Reasons for restoring balance 4. 1. Unless more effective action is taken against the creation of barriers at source, completion of the single market will be like a constantly receding horizon (even if it is in any case inevitable for national and/or regional disparities to persist in a single market regarded as ‘completed’). Thus, even when the main directives have been adopted, maintaining the single market in a proper operational state will remain a constant problem for which appropriate ‘self-correcting solutions’ will have to be found. 4. 2. Similarly, there will be no satisfactory solution to the problem of alleviating, simplifying and clarifying regulations on the single market as long as this question has not been thought through with the adoption of measures which also concern regulations at national and regional level. Finally, it should be stressed that this increase in 3. 6. national rules has coincided with an inverse trend in 4. 3. It also seems necessary for the Member States to change their behaviour as the introduction of the euro approaches. Just as the stability and growth pact requires 25. 5. 98 EN Official Journal of the European Communities C 157/39 a convergence of economic and budgetary policies, so the operation of the single market under a single currency should require more convergence of legal, regulatory and administrative national provisions, and at all events a constant concern for ‘euro-compatibility’. 5. 2. In particular, the Member States should adopt fewer national regulations in fields which are covered by harmonization measures at Community level. First and foremost, this should concern national measures for transposing directives, in which the states should be careful not to create excessive administrative provisions which go beyond the aim of the directive concerned. 4. 4. It is also advisable to ensure greater transparency on new national measures, so as to guard against risks of drift which could possibly arise from two innovations in the Treaty of Amsterdam (signed in 1997). The new treaty provides Member States with the possibility not only of maintaining but also of introducing stricter national rules than Community legislation [Article 95(5), formerly Article 100a(4)], while Article 95(3), formerly Article 100a(3), already provides Member States with a high level of protection for their nationals. While the European Commission retains a monitoring power over these measures for a period of six months, its agreement is tacitly assumed at the end of that period. Moreover, the Member States can strengthen, through Article 176 (formerly 130t), the measures adopted by the European Union in the environmental field on the basis of Article 175 (formerly 130s). 4. 5. Finally, this question will increase in scale with the prospect of new enlargements, which will increase the possibilities for Member States to create new barriers at source. It will therefore be necessary to agree upon and implement appropriate solutions before then. Thus a close, lasting and satisfactory relationship 4. 6. must be re-established between the operating needs of the single market, protection of the consumer and the environment, and the requirements of subsidiarity. This relationship must be based on measures which ensure greater fluidity in trade, more simplicity in regulations, more compatibility between national measures, and greater transparency overall at single market level. 5. Measures recommended at national level 5. 1. In general terms, it seems essential to persuade Member States to change their attitude towards excessive regulation. The European Council itself has already acknowledged the need for progress to lighten the burden of regulation in the Member States themselves. It is therefore important to apply to the Member States the recommendations which the Molitor Report addressed to the Community institutions: better-ordered existing regulations, fewer new regulations, and further simplification of the regulations in force. The Member States should be asked to present to the Commission each year an updated report on their contribution to the alleviation and simplification of rules in Europe. The Commission could then make a summary for the attention of the European Council. 5. 3. When a Member State adopts a national regula- tory measure which can affect the single market, it should in principle be required clearly to include in these rules a clause worded according to a model common to all the Member States and stipulating that it has taken account — subject to a European notification — of the most effective means to avoid barriers to the import of products freely produced and marketed in another Member State. It should also be ensured that, 5. 4. in practice, national standardization bodies refrain from adopting a national regulation in a field which is covered by a European standard in preparation. 5. 5. The training of national elected representatives, officials, magistrates and jurists in the requirements of the single market should also be developed, with special attention given to the principle of ‘national treatment’ of Community citizens which has not yet been accepted in administrative cultures (cf. rules on social security, taxation, training residence questions, etc. ). This requirement should extend to the regional and local level, where European regulations are often insufficiently well-known. For example, practical application of the mutual recognition of qualifications or the right of residence of Community nationals frequently makes it necessary to take direct action with the body responsible. 5. 6. Information efforts should also be directed towards non-national Community citizens, in order to enhance their knowledge of the most relevant legislation and administrative procedures, and to simplify their exercise in practice of freedom of establishment in the European Union. 5. 7. The Member States of EFTA, which are already closely associated with taking on the acquis communau- taire, and as far as possible the states which have applied for European Union membership, which are to incorporate this acquis gradually in their rules, should be encouraged to take similar measures, which would also be subject to an appropriate follow-up by the European Commission. C 157/40 EN Official Journal of the European Communities 25. 5. 98 6. Measures recommended at Community level application of directives, this should not run counter to the need for harmonization. It would therefore be advisable to restrict the use of such optional directives. 6. 1. First and foremost, the above recommendations addressed to the states could be more easily applied if they were covered by a common commitment such as a code of conduct for Member States. Such a code of conduct could take the form of a Council recommen- dation, giving rise to Commission monitoring. As regards the procedure for prior information 6. 5. and notification of draft regulations, it should be extended to services which are not currently within the scope of Directive 83/189. An initial step forward would be for the Council and Parliament rapidly to adopt the Commission proposal on its extension to information society services (1). 6. 2. As regards Community regulations, one must be aware of the limits to the extent to which they can be streamlined, especially given the Member States’ unchanged tendency to legislate and regulate excessively themselves. Indeed, one of the ways of promoting the streamlining and simplification of regulations in Europe would be to maintain Community regulations at a sufficient level to bring national regulations closer together. But, above all, their effectiveness must be strengthened. 6. 6. The Commission should directly consult the European representatives of sectors concerned about the draft national rules notified to it. It should also be possible to bring notifications of draft rules by Member States to the knowledge of all concerned by creating a data bank which could be consulted via Internet. This data bank should also give users of the single market an overview of national regulations in force within the single market. 6. 3. It must first be noted that harmonization loses a good deal of its effectiveness when it imposes on Member States only a minimum level, allowing them the freedom to go beyond it. This is often the case with harmonization covering in particular environmental protection and consumer protection, where the Member States can adopt national regulations going beyond those adopted at European level. This asymmetry can deprive harmon- ization of a good deal of its effectiveness, as the derogations jeopardize uniform application of Com- munity law by prejudicing free movement of products, free movement of persons, free provision of services and freedom of establishment in the single market. It would be desirable to arrive at a more effective concept of harmonization, by envisaging, in certain fields where this approach would be appropriate, greater use of regulations rather than directives. Such measures, by limiting the possibility of diverging additional national rules, would also contribute greatly to streamlining and simplifying rules in Europe. The adherence of all the Member States would be needed to ensure effective application of this new type of requirements; this adherence would be encouraged by effective, thorough prior consultation involving the Member States and all groups affected by the proposed measure, and covering also the most suitable type of implementation. 6. 4. It would also be advisable to re-examine ways of using open or optional directives. In some cases, the ‘residual’ powers left to Member States in the application of some directives can be very important (for example, the possibility of choosing among the products or substances listed at European level those which they wish to authorize on their territory). Although it may be necessary to leave a certain flexibility in the 6. 7. On mutual recognition, it must be noted that it is not always effective in the fields where European standards are lacking, thus contributing to the persis- tence of barriers on the Community market. Certain checks are not yet recognized, particularly for food products. Moreover, the difficulties encountered by the European Organization for Testing and Certification (EOTC) in playing its role properly in the various fields of activity of enterprises, particularly quality assurance systems, lead the national certification bodies to con- clude bilateral agreements on mutual recognition. The question of practical application of the principle of mutual recognition thus needs to be reconsidered from several angles: 6. 7. 1. A wide-ranging information campaign on the significance of the CE mark should be addressed once again to economic operators by the Commission and the Member States. 6. 7. 2. More work should be done at European level to improve transparency with regard to mutual recog- nition of conformity checks on products. Indeed, it is too often found that a multiplicity of checks persists on products passing between the Member States, both in the regulated sector and in the voluntary sector. Common points of reference should be decisively adopted at European level on the quality of checks. 6. 7. 3. Supplier’s declarations regarding conformity with the essential requirements laid down by the European Union should be generally regarded as (1) OJ C 158, 26. 5. 1997. 25. 5. 98 EN Official Journal of the European Communities C 157/41 adequate by the Member States, without the need for additional checks, provided that an effective system for exchange of information on non-conforming products can be set up in parallel between the Member States. The same facility for third country products should depend on the existence of reciprocity. As regards the conformity markings them- 6. 7. 4. selves, it is quite common to see national or technical marks in addition to the CE mark on products. This multiplicity of markings runs counter to the objective of simplification and transparency which must be the rule as regards technical barriers to trade. It would be particularly useful if further consideration were given to this point by the Commission, the Member States and the various actors concerned with conformity certification. 6. 7. 5. Finally, it would be advisable to strengthen checks at the external frontiers of the EU and the EEA to ensure that the CE marking is not falsely applied to imported products, particularly mass-consumption products. In order to verify that harmonization directives 6. 8. and mutual recognition provisions have a real effect on the lifting of barriers, a test for ‘real lifting of barriers’, going beyond the strict framework of legal application of the directives, should be incorporated in the ‘score- boards’ drawn up by the European Commission as part of the implementation of its action plan. 7. Conclusions Despite the undeniable progress made in the operation of the single market, the Member States continue to adopt many rules at national level in fields which are meant to be subject to Community harmonization. This situation, which imposes a heavy surveillance burden on the Commission, is worrying in two ways. Firstly, it shows that the Member States hardly apply to themselves the objective of alleviating rules which they advocate at European level. Moreover, it perpetuates a constant process of creation of new potential barriers to trade, even if prior notification of procedure makes it possible to correct many of them. It therefore seems essential to be vigilant about the situation and to continue the analysis of it (new developments, sectors concerned, forms taken by new barriers). Indeed, the development of this phenomenon at its present rate would destabilize the operation of the single market and compromise its completion. At this stage the Committee would stress the need for rapid adoption of new initiatives at both national and Com- munity level to remedy the situation: 7. 1. At national level: 6. 9. It is also essential to go beyond the progress achieved in recent years by strengthening the resources for European standardization committees, in order to have the largest possible number of common references. 7. 1. 1. The Member States should apply the same discipline which they require of the European Union to alleviating and clarifying rules in Europe, and should present each year a report summarizing their contri- bution in this field; In the field of free movement of workers, there 6. 10. is a need to follow up the Flynn Action Plan (1) based on the recommendations made by the ‘Veil Group’ in March 1997. 7. 1. 2. In particular they should be careful, in transpos- ing directives, not to create excessive administrative requirements which go beyond the objectives set by these directives; 6. 11. Finally, it is a sad fact that small and medium- sized businesses, which under the Community definition account for 99. 8 % of all businesses in the EU, are the main victims when the internal market does not operate as it should. The smallest firms and local businesses, which lack the requisite legal, staff and financial resources, are particularly hard hit by barriers that arise. Thousands and thousands of firms are thus deprived of the benefits awaited of the EU-wide market. The Committee therefore urges the European Com- mission and the Member States to launch an information campaign to explain to small firms the rights they enjoy in the single market and to boost information facilities, in particular the Euro-Info-Centres, with this in mind. (1) COM(97) 586 final of 12 November 1997. 7. 1. 3. Draft national rules which can affect the single market should include a standard clause stipulating that it has taken account — subject to a European notification — of the most effective means to avoid barriers to the import of products freely produced and marketed in another Member State; 7. 1. 4. Measures should be taken to raise the aware- ness of elected representatives, officials and jurists in the Member States and train them in the requirements of the single market; 7. 1. 5. Non-national Community citizens should receive clearer information on the applicable procedures which would make it easier, among other things, for them to avail themselves of the right to establishment; C 157/42 EN Official Journal of the European Communities 25. 5. 98 7. 1. 6. European countries associated with the single market (EFTA and applicant countries) should be encouraged to take similar measures. 7. 2. At Community level: First and foremost, the above recommen- 7. 2. 1. dations addressed to the states could be more easily applied if they were covered by a common commitment such as a code of conduct for Member States; Community rules should be maintained at a 7. 2. 2. sufficient level for effective approximation of national rules; In certain fields where this approach would be 7. 2. 3. appropriate, directives should give way to regulations, after all those concerned have been consulted; 7. 2. 4. Open or optional directives should be used only in limited, strictly justified cases; 7. 2. 6. The representatives of European economic and social partners should be consulted on these notifi- cations; it should also be possible to access them on an Internet data bank, where it would also be desirable to give an overview of national rules in force within the single market; 7. 2. 7. An information campaign on the CE mark should be relaunched; transparency should be strength- ened on the mutual recognition of conformity checks; checks at external frontiers should be better harmonized. Suppliers’ declarations of conformity should suffice, while being supplemented by an effective Community system of information exchange on non-conforming products; 7. 2. 8. The Commission’s ‘scoreboards’ on implemen- tation of directives should include a test for ‘real lifting of barriers’; 7. 2. 9. The resources of the European standardization committees should be strengthened to make available the largest possible number of common references; 7. 2. 10. On the free movement of workers, follow-up action should be taken on the Flynn Action Plan; 7. 2. 5. Prior notification for proposed rules should be extended to cover not only products but also services, starting with information society services; 7. 2. 11. A campaign should be launched to inform small and medium-sized businesses, and the resources of the Euro-Info-Centres should be stepped up. Brussels, 25 March 1998. The President of the Economic and Social Committee Tom JENKINS 25. 5. 98 EN Official Journal of the European Communities C 157/43 APPENDIX I to the opinion of the Economic and Social Committee The following passages of the section opinion, retention of which had been requested by more than a quarter of the votes cast, were rejected as a result of amendments adopted in plenary: Point 6. 3 ‘. or where appropriate, the adoption of more binding directives imposing not only minimum requirements but also maximum requirements. ’ Results of voting on deletion of the above phrase For: 45, against: 26, abstentions: 8. Point 7. 2. 1 ‘To facilitate the implementation of these recommendations, the Council should express a commitment on the part of Member States which could lead to a recommendation including a code of conduct to prevent the creation of undesirable new barriers at source. ’ Results of voting on deletion of this point For: 52, against: 30, abstentions: 5. C 157/44 EN Official Journal of the European Communities 25. 5. 98 APPENDIX II to the opinion of the Economic and Social Committee Table of notifications by Member States in 1997 Notifications (Article 8. 1) Comments (Article 8. 2 + Article 7 of the EEC/EFTA Agreement) Detailed opinions (Article 9. 1) Intentions for directives (Articles 9. 2 + 9. 2 bis) Comments Detailed opinions Intentions for directives Member State Notifi- cations Member Com- States mission EFTA Member Com- States mission 9. 2 9. 2 bis Netherlands Austria Germany United Kingdom Belgium France Denmark Spain Italy Sweden Finland Greece Portugal Ireland Luxembourg 1 342 106 99 71 59 51 40 35 31 23 22 12 7 3 53 20 18 11 8 32 18 10 9 3 5 6 6 1 61 29 11 6 38 16 24 8 9 11 7 9 3 2 5 24 2 6 1 3 11 11 1 29 8 11 1 1 18 2 2 14 1 6 8 6 19 4 3 33 6 8 4 7 5 2 2 2 Total EEC 901 200 234 64 101 101 1 1 1 2