European Single Market

9 Key excerpts on "European Single Market"

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  eBook - ePub

  Battle Of Single European Market

  • Gilles Grin, Grin(Authors)
  • 2012(Publication Date)
  • Taylor & Francis

    (Publisher)

  Introduction to the Single European Market

  DOI: 10.4324/9780203040300-1

  Concepts and Substance

  In this piece of work we study the ‘single European market’ through a multidisciplinary approach. Our first mission in this introduction to the work is to try and clarify the meaning of the various concepts pertaining to European economic integration and to present the very rich substance of today’s single market. In his book The Theory of Economic Integration published in 1961, Bela Balassa* presented the following typology: ‘economic integration, as defined here, can take several forms that represent varying degrees of integration. These are a free-trade area, a customs union, a common market, an economic union, and complete economic integration. In a free-trade area, tariffs (and quantitative restrictions) between the participating countries are abolished, but each country retains its own tariffs against nonmembers. Establishing a customs union involves, besides the suppression of discrimination in the field of commodity movements within the union, the equalization of tariffs in trade with nonmember countries. A higher form of economic integration is attained in a common market, where not only trade restrictions but also restrictions on factor movements are abolished. An economic union, as distinct from a common market, combines the suppression of restrictions on commodity and factor movements with some degree of harmonization of national economic policies, in order to remove discrimination that was due to disparities in these policies. Finally, total economic integration presupposes the unification of monetary, fiscal, social, and countercyclical policies and requires the setting-up of a supra-national authority whose decisions are binding for the member states.’1

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  Brick by Brick

  The Building of an ASEAN Economic Community

  • Denis Hew Wei-Yen(Author)
  • 2007(Publication Date)
  • ISEAS Publishing

    (Publisher)

  The meaning of the term, therefore, requires careful examination. To clarify the issues, section 2 defines a single market in terms of concepts of economic integration and the Law of One Price. Section 3 discusses the conditions that are necessary for the Law of One Price to hold. Section 4 discusses the progress that has been made towards complete economic integration in a sample of RTAs, including ASEAN and two of the three other RTAs that have adopted the goal of a single market (the EU and CER). Section 5 considers the steps necessary for ASEAN to become a single market. 2. A Single Market = The Law of One Price The idea of a single market comes of course from the European Economic Community (EEC)/EU. Initially the EEC created by the 1957 Treaty of Rome was a Common Market. This European concept of a common market was expressed in terms of the “four freedoms”, that is, freedom of trade in goods, services, capital, and labour. A Common Market required the abolition of all border restrictions on the movement of goods, services, capital, and labour. It also required the establishment of “common policies” in four designated areas: external trade, agriculture, transport, and competition. However, the 1985 White Paper (Commission of the European Communities 1985) identified 280 remaining restrictions on these movements and proposed measures to abolish all of these restrictions. The White Paper did not use the term single market. It spoke instead of a “fully unified internal market”. The implementation of these measures and the associated debate soon gave rise to the idea of a Single Market. The Single European Act of 1987 formally created a Single Market that came into operation on 1 July 1987. The Single Market is something more than the Common Market.

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  Toward a North American Legal System

  • J. McHugh(Author)
  • 2012(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Yet the question remains at to how effective are different regula- tory strategies in achieving the single market and what lessons can be drawn from the ability of the EU to develop functional and effective governance structures. Paying particular attention to the specific challenges created by market integration will perhaps provide a basis of comparison with debates over legal harmonization in NAFTA, but it suggests that more attention needs to be given to the evaluation and effectiveness of different strategies within Europe. Single Market: State of Play The fundamental idea of a common or internal market is that “economic frontiers” between national markets are diminished to allow for the mobil- ity of goods, services, and production factors. For nearly two decades, the overriding goal of the European integration project has been to achieve this goal. Now attention has turned toward making the European economic sys- tem deliver by improving the dynamics of the single market (see Table 7.1 for a review of status of single market). As Pelkmans concludes, “progress in entrepreneurial activity and improved competitiveness can be improved generally by measures aimed at reducing regulation, improving labor mobil- ity and service liberalization.” 4 In service, the denial of free movement and hindrance of free establishment create problems in facilitating cross-border trade. 5 Firm start up or authorization requirements, obligatory membership

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  The Economics of Europe and the European Union

  • Larry Neal(Author)
  • 2007(Publication Date)
  • Cambridge University Press

    (Publisher)

  249–69. 8. Desmond Dinan, Ever Closer Union? An Introduction to the European Community , Boulder, CO: Lynne Rienner Publishers, 1994, p. 345. 9. Ibid., p. 346. 10. The Commission attempted to block subsidies of DM241 million ($163 million) to Volkswa-gen plants in Saxony. While Germany was trying to reverse the decision, Saxony had already disbursed DM92 million. “Bonn and EU resort to court,” Financial Times , September 12, 1996, p. 2. 11. Xavier Vives, “Banking competition and European integration,” in Alberto Giovannini and Colin Mayer, eds., European Financial Integration , New York: Cambridge University Press, 1992, p. 18. 12. European Commission, The Single Market in 1995 , Luxembourg: 1996, section 1. 13. For the list of minimum rates for all the covered items, see the DG10 website: http://europa.eu.int/en/comm/dg10/incom/xc5/ewfqa/ewfq0902.htm#09.02.00. 14. European Commission, The Single Market in 1995 , note 12. 15. European Commission, Update on the Internal Market: Scoreboard no. 12 , Luxembourg: 2004, p. 25. 8 The single market in labor: from refugees to Schengen In chapters 3 and 7 , we saw how the elimination of trade barriers, whether they were transparent tariff barriers or opaque non-tariff barriers, affects the flow of goods and services among countries. The underlying assumption in the economic theory we used is that goods and services are traded but the factors of production responsible for producing them – capital, labor, and land – remain fixed in each country and do not move across their respective national borders. For labor and capital to be allocated efficiently across regions within each country that is part of an economic union, however, they must be allowed to move freely from one location to another. If each factor moves to where it can receive the highest return within an economic union, then total output for the union as a whole will be maximized.

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  Trade Protection in the European Community

  • Ludger Schuknecht(Author)
  • 2017(Publication Date)
  • Taylor & Francis

    (Publisher)

  Chapter 9

  THE SINGLE EUROPEAN MARKET

  9.1 Introduction

  The European Community envisages the completion of its Single Market by the end of 1992. Before the current liberalization programme started in the mid-eighties, the unsatisfactory state of the internal market had been lamented and the benefits of internal liberalization had been propagated. In 1985, the EC Commission published the White Paper arguing that the completion of the Single European Market is necessary for EC industries to remain competitive. “Disunity” in the EC would lead to a decline vis-a-vis the U.S. and Japan. The assessment of existing barriers to trade found significant scope for internal liberalization and identified three major barriers: physical barriers, such as administrative costs related to border crossings, technical barriers, e.g. quantitative restrictions and regulations, and fiscal barriers consisting of export subsidies, tax exemptions etc.

  The highly publicized Cecchini Report by the EC Commission (1988)1 estimates that the completion of the Single European Market will result in an extra GDP growth of 2.5% to 6.5% plus potential medium and long-term dynamic gains. Other estimates by Baldwin (1989) have been even higher. Among the beneficial effects, factor price equalization, technology transfer, utilization of scale economies and more product variety are expected. Smith and Venables (1988) estimate the “costs of non-Europe” by looking at industries with economies of scale. They find that significant welfare gains will accrue because larger markets reduce production costs and, more importantly, price differentiation within the EC.2 Non-member countries including developing countries will also profit from the larger market as long as a “Fortress Europe” does not arise (Findlay, 1990).

  The Single European Act of 1987 launched the project to complete the Single European Market. In this document, the member countries of the EC agreed on an agenda of completion and a change in the voting rule for trade policy issues. These factors give the project credibility because single member countries cannot veto trade liberalization any more and have to consent on all open issues before the end of 1992 (Holmes, 1991).

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  The European Union and Global Capitalism

  Origins, Development, Crisis

  • Magnus Ryner, Alan Cafruny(Authors)
  • 2016(Publication Date)
  • Red Globe Press

    (Publisher)

  The Single Market 63 have the legislative initiative. Furthermore, with company law, corpo-rate governance regulation, and a Second Banking Directive based on mutual recognition, the EMU would be founded on deregulated finan-cial markets and highly disciplinary convergence criteria (see Chapter 4 ), and the new European Central Bank (ECB) would have its mandate and constraint set by impeccably monetarist principles. Ensuring price stability for the single market would be its overarching brief. In addition the United Kingdom (and later Denmark and de facto, if not de jure, Sweden) were given and exercised opt-outs from the single currency. Explaining the relaunch The relaunch revived interest in the EU as a novel development in inter-national relations and inspired a great deal of new scholarship. The SEA and the EMU provided an ideal testing ground for theories of European integration, and a great deal of the financial support for this scholarship on both sides of the Atlantic came from the Commission’s new academic outreach programmes (Klinke, 2014 ). Liberal economic theory provided the intellectual and normative underpinnings of this scholarship. The Cecchini Report by the European Commission (1988) itself was, as explained in Chapter 1 , essentially a cost-benefit analysis in line with Bela Balassa’s variant of trade theory, albeit with relaxed assumptions on market imperfections. This report estimated the oppor-tunity costs for failing to remove the nontariff barriers as laid out by the single market to be 5 per cent of total annual GDP. The Commission’s economists predicted that if the single market programme had been fully implemented, single market annual growth would be 7 per cent by 1992, with an inflation rate of 4.5 per cent, and 5 million new jobs would have been created (European Commission, 1988: pp. 175, 176, cited in Boyer, 1990 : pp. 114–15).

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  The European Economy

  The Global Context

  • Christopher M. Dent(Author)
  • 2002(Publication Date)
  • Routledge

    (Publisher)

  3 Single market, single money At the beginning of the 1990s, the European Union set itself an ambitious agenda for deepening the integrational links between its member states. This was embodied within the terms of the Maastricht Treaty which envisaged some form of economic and monetary union (EMU) by the end of the decade. These aspirations built on the single European market (SEM) programme which by the end of its target date of 1992 had installed most of the components for an internal market within the Community. In addition to political factors, a common belief which united such ambitions was that a more integrated EU would improve its competitive position within the world economy, thus leading Europe onto a higher path of prosperity in the twenty-first century. Both the SEM programme and plans for EMU must therefore be seen at least partly as strategic reactions to external forces being impinged on the Community. In this chapter, we shall examine the composition and intent behind these progressive stages of European economic integration and the potential benefits as well as costs that they bring. In addition, the global dimensions of both the SEM and EMU will also be considered. A SINGLE MARKET FOR EUROPE The origins of the SEM programme As we know from Chapter 2, the single market ideal has roots in the Treaty of Rome. However, it was not until the mid-1980s that a culmination of factors had combined to overcome previous inertia which had hindered any plans for its realisation. We must also evaluate the SEM process in the perspective of global competition and the globalisation of business activity. The Community’s position was slipping in an increasing number of high-growth industries due to a combination of successful business strategies conducted by US and Japanese companies and the respective advances made in new product and process technologies. Europe’s competitiveness was also being undermined in more mature industries from newly industrialised countries

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  European Integration

  Scope and Limits

  • M. Holmes(Author)
  • 2001(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  The EC Commission gleefully promoted common standards throughout Europe, not least because Commission power and responsibility rapidly expanded. The consequences of this approach have even been attacked by the former EC Commis- sion Vice-President Lord Tugendhat who told a Chatham House audience that: From Single Market to Single Currency 79 I believe, a major component of the widespread disillusion [with the EC] stems from the legislation needed to bring the Single Market into being. That legislation has proved to be unprecedentedly intrusive. Partly, there is the question of sheer scale – 282 individual items of European legislation required to bring it into effect. Partly too it is a result of so many existing national rules and regulations on technical standards, health, safety, environment and other matters being so de- tailed that in order to create a level playing field EU regulations had to follow suit. As a result it has been brought into what Douglas Hurd has described as ‘the nooks and crannies’ of national life all over the European Union. This is by no means only the result of Commission initia- tives. The Single Market has become the means by which individual member states have sought to push their own agendas on social, environmental and other matters. This has added to the volume of proposals the Commission has brought forward. 5 By the time the Single Market came into view, on 1 January 1993, it was clear that its philosophy was based upon harmonis- ation or standardisation: MPR had been effectively lost, except in non-controversial areas. MPR might prevail if there was no dispute about a product, but given the complexity of modern industrial society, it was almost certain that the Commission at some stage would be called upon to adjudicate in terms of the various standards which were being applied. From the start the Single Market was being transformed into a uniform market over which the EC Commission acted as judge and jury.

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  Europe at Sixes and Sevens

  The Common Market. the Free Trade Association and the United States

  • Emile Benoit(Author)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  IL The Common Market as an Economic Community THE EUROPEAN COMMON MARKET is first and foremost a customs union—that is, a group of nations joined together to eliminate restrictions on their trade with one another. But its deepest significance is that it transcends a customs union and is planned to include many other features, as well, of a true economic union. The Treaty itself envisages not a full economic union (although that is the ultimate aspiration of most of its proponents) but a limited economic union. The goal is actually a brand-new type of entity for which a new title has been coined—an economic community. 1. MORE THAN A CUSTOMS UNION An economic community contains the following elements, going beyond a mere customs union: (1) free movement of labor, capital, and enterprise within the community; (2) restraints on govern-mental or private measures having a discriminatory or restrictive effect which might offset, replace, or nullify the benefits of the removal of restraints on trade, or which would distort competi-tion within the area; (3) the harmonization or bringing into alignment of the members' economic and social policies and 30 The Common Market as an Economic Community social standards, as, e.g., monetary-fiscal and employment policies, social security policies and standards, wage standards and wage levels; (4) the establishment of common operating agencies, in-cluding development and adjustment funds, and the sharing on a joint basis of responsibility for developing overseas territories or countries particularly attached to any of the members of the community; (5) some sort of political goal, involving at a mini-mum a recognition of a high degree of mutuality of interest, and an aspiration toward an increasingly closer association. An economic community falls short of a full economic union in that it lacks a common currency and leaves considerably more scope for national differences and autonomy in economic matters.

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