1957: replacing seperate markets of individual MS to 1 single common market art 3 EC

Four fundamental freedoms and fair competition.

1957: replacing seperate markets of the individual MS to 1 single common market art 3 EC Four fundamental freedoms and fair competition.

Tools available to achieve goals of EC Treaty:1.Treaty provisions (art 3 EC)2.Secondary European law in directives and regulations3.Common policies

Ad 1: art 3 EC instructs MS to abolish all obstacles to the freedom of movement.

The EC treaty’s prohibition of trade barriers gives European businesses the opportunity to sue national authorities (art 263 EC).

Ad 2: EU legislature has the authority to create a single market by using directives and regulations (art 288 EC) aim: - standardization of goods across the EU- setting higher standards for products and consumer safety.

Problem = Regulation for products difficult because often national legislation would like to create own regulation.

Ad 3: in some cases, EU policies have overruled the national ones (e.g. on the subject of common agriculture, fishing, customs laws)

Aim: - standardization of goods across the EU (but conflicts with national legislation!)

- setting higher standards for products and consumer safety.

EU law necessary to ensure that business can overcome problems in cross-border trade, in the internal market.

2. Private law aspects of doing business in the common market Private law focusses on legal areas (e.g. contracts, ownership) mandatory & permissive law. Freedom for private parties.

Public law deals with government authorities mostly mandatory.

Problem arises? Is contract in accordance with both public and mandatory private law? does contract itself provide solution? Otherwise applicable permissive law.

Questions 1: Jurisdiction? EEXQuestions 1: Jurisdiction? EEX

Question 2: Applicable law:

Step 1: Special treaty: CISG provides answer to conflict!

Step 2: ECO rules of reference (to nat. Law which will provide answers)

Step 3: national rules that deal with IPL

Question 3: Specific treaty that provides an immediate solution to a conflict between contracting parties

Dispute? 4 sources to look for answers:

Dispute? 4 sources to look for answers:

1: Contract: entails many conditions, o.a. delivery terms (incoterms) and payment terms (Directive on Payment Services Aim is to make cross-border payment as easy, efficient and secures domestic payments within a MS)

2: General conditions: using these means that businesses do not have to negotiate every condition individually every time they make a contract who’s set of rules usually depends on market position of seller and buyer.

3: CISG provisions are permissive.

4: national rules and jurisdiction applying to contract: only if 1-3 do not provide the answer

2. Infringements of free movement of goods

Goods are products in every stage of the economic proces.

Both industrial products as agricultureproducts are goods (including garbage)

NB: National authorities have to respect the prohibitions imposed by the articles of the EC treaty.

4 stages of economic integration .1. Free trade area:free movement of goods between MS.

2. Customs union:common tariff

3. Common market:no hinder in productive resources

4. Economic union:common valuta and coordinated economic policy

(5. Total economic union or Political Union)

National measures vs cross-border

National measures which hinder intra-community trade (cross-border) or activities relating to goods, persons, services and capital are in principle prohibited.

Justification or restrictions:- Explicitly in EC treaty- Case law.

Free movement of goodsInternal and external dimension:

Goods originating within the EU enjoy the rights of free movement between the MS, while goods originating outside the EU enjoy free movement only once they have paid the common custums tariff, if one is due.

Pay common custum tariff

Free movements of goods art 23/25 EC

Tariff barriers Non-tariff barriers

Custom duties or charges having equivalent effect prohibited (art 25 EC)

No exception art 30/36

exportImportArt 28/34 EC:Quantative restrictions ormeasures havingequivalent effect prohibitedDasson ville

distinctly applicable measureProhibition art 28/34 EC,Never exception for urgent reasons(Cassis de Dijon), unless:Art 30/36 EC (limitative) + proportionality

Non-distinctly applicable measureProhibition art 28/34 EC, unless: -Art 30/36 EC (limitative)- Cassis de Dijon (rule of reason) Not limitative and reasonable, fair and proportionality

Internal taxesAllowed, unlessdiscriminatory orprotectionist, art 90

Exceptions to free movement of goods art 30/36 treaty Protection of public morality.

Protection of public policy or public security.

Protection of health and life of humans, animals or plants.

Protection of national treasures possessing artistic, historic or archaeological value.

Protection of industrial and commercial property.

Financial barriers

Case Co-frutta: art 25 EC is NOT applicable to an internal system of tax applied systematically to categories of products regardless of the origin of the product. amount to a discriminatory or protective internal taxation.

E.g.: Greece has a value added tax system. A measure lays down an increased rateof 36% for goods mentioned in an annex. In this annex certain spirits are mentioned.Greece does not produce this spirits, whereas Spain does. Internal rule and no reference to origin. So no art 25 EC, but art 90 EC, because mounts to discriminatory measure.

Custom duties or charges having equivalent effect prohibited (art 25/30 EC)

Internal taxes: Allowed, unless discriminatory art 90

Art 25 EC deals with fiscal barriers at the frontier and art 90 deals with fiscal barriers internally within a MS lid 1 prohibits discriminatory taxation in respect of goods which are similair. Lid 2 prohibits protectionism in the taxation of goods which are in competition. Unlike art 25, which prohibits customs duties and charges having equivalent effect, art 90 allows MS both to raise revenu by tax and to determine the content of their own taxation policy. Only limitation in art 90 is that the system of tax must be neither discriminatory nor protectionist. Art 90 (1) (similair goods): prohibits the MS from imposing a higher tax on goods imported into the MS than a similar domestic good. Key question is whether goods are similar. 2 test:

- formal test: examining whether the products in question normally come within the same fiscal, custioms or statistical classification.

- broader test: combines a factual comparison of the products with an economic analysis of their use. Thsu the scope of art 90 is determined not ion the basis of the strictly indentical nature of the products but on their similar and comparitive use. A directly discrimination can’t be justified under art 90, but an indirectly discriminatory tax can be justified if the MS can objectively justify the tax.

Nevertheless, Court has recognized that a charge can be lawful, if:

1.Payment for genuine administrative services rendered to the importer/exporter.

2.Charges for inspections required by community law.

3.Charges falling within the scope of internal taxation.

Non-financial barriers

Free movements of goods art 23/25 EC

Principle of mutual recognition:Applied by the ECJ in the context of the evaluation of national measures,namely in the context of art 28 EC.Arguments: goods which fulfill the legal requirements of one MS (lawfullyproduced and marketed) must also be legally traded in another MS.

Quantative restriciton or equivalent effect: case Masterfoods.

ImportArt 28/34 EC:Quantative restrictions ormeasures of equivalent effect prohibitedDasson ville

distinctly applicable measureProhibition art 28 EC,No exception for urgent reasons(Cassis de Dijon), unless:Art 30 EC (limitative) + proportionality

Justification measure:Casis de Dijon: in so far as those provisions may be recognised asnecessary in order to satisfy mandatory requirements relating in particularto the effectiveness of fiscal supervision, the protection of public health, thefairness of commercial transactions and the defence of the consumer.

Conditions:1. No community measures (no harmonization)2. National measure applies in a non-discriminatoir manner3. Existence of a mandatory requirement 4. Measure is proportionate.

ImportArt 28/34 EC:Quantative restrictions ormeasures of equivalent effect prohibitedDasson ville

Non-distinctly applicable measureProhibition art 28/34 EC, unless: -Art 30/36 EC (limitative)- Cassis de Dijon (rule of reason) Not limitative and reasonable, fair and proportionality

proportionality

2 questions:1.Is measure capable of reaching the

declared aim? (suitability test is measure suitable)

2.Test of necessity, weighing the competing interest. 2 elements: Could the same aim be achieved with a less restrictive measure? If not, has the measure have an excessive effect on the applicant’s interest.

You can use the rule of reason exception only for:

- non-discriminatory measures- Urgent demands- If the measure is necessary and

proportionate

Keck: violation of art 28/34 EC does not apply to sale-requirements (but it does for productsdemands)

In sum, free movement entails?? No financial barriers. No quantative barriers. No measures with equal effect

(Dassonville 1974) Mutual recognition (Cassis de Dijon

1978) Prinicple of country of origin

Exceptions to free movement of goods

Protection of public morality. Protection of public policy or public

security. Protection of health and life of humans,

animals or plants. Protection of national treasures possessing

artistic, historic or archaeological value. Protection of industrial and commercial

property.

Case law: 3 stage approach 1. classification distinctly or

indistinctly applicable. 2. breach of art 28? 3. consider whether, in case of

distinctly appl.measure, one of art 30 derogations applies; or in case of Indistinctly appl.measure art 30 & mandatory requirements (Casis de Dijon)

3. Manufacturing in Europe Consequence of EU policy:- Increased market integration- Reduction in trading costs, due to

o.a. technical progress.

NB: developed EU countries are losing ground to Eastern Europe countries and emerging countries due to the low wages.

More efficient channels from manufacturing plant to customer in the W-Eur. economies may help to prevent a shift to low-wage countries.

Threats to enterprises- Increased competition (difficult to

maintain marketshares and revenues). - Individual countries are reluctant to give

up their quality control system in favour of a European standard.

Possible responses to threats are:1.Focussing on hi-tech and advanced

production technologies2.Expansion of skilled workforce in Europe

4. The marketing of goods in Europe. A European market has to deal with:- im- and exporting,- issues of cross-cultural

considerations- adaptation of product positioning.

EU countries with small populations export goods to countries with big populations big market.

Advantages of the EU internal market place:

- countries can specialize in production of goods in which they have an advantage

- Production on larger scale more cheaply

- Risk is being spread out more and information is exchanged more freely more innovation.

In sum: Free movement of goods:- strengthens the internal market- enhances the competitive strength of

the EU in relation to other global economic blocs.

Careful planning and profound knowledge of the target countries, especially with respect to their sociocultural characteristics and language, are key factors for succes in other countries.