EU Internal Market: Approximation of Laws and Free Movement
Approximation of Laws in the EU Internal Market
Article 114 TFEU states that the Council shall “issue directives for the approximation of such laws, regulations or administrative provisions of the member states as directly affect the establishment or functioning of the internal market”. Until the early 1980s, “approximation” tended to be interpreted by EC decision-makers as meaning “harmonisation”. However, from the early 1980s, a more flexible and less rigid approach developed towards differences in national standards and requirements. This development followed upon the “breakthrough” Cassis de Dijon case in 1979, when the ECJ ruled that products conforming with the standards of one member state could not be excluded from the markets of other member states unless they could be shown to be damaging to health, safety, the environment, or other aspects of the public interest.
The ruling allowed the Community to be less concerned with the standardisation of technical details and to adopt a “new approach” under which a simpler and speedier process would apply. The main aspects of this process, which still applies, are:
- Whenever possible, legislation does not seek to harmonise but rather to approximate, which means that attention is restricted to laying down the essential requirements that national standards and specifications must meet (on, for example, product standards and health and safety conditions).
- As long as the essential requirements are met, member states must mutually recognise the specifications and standards of other member states.
- National specifications and standards are gradually being replaced by European specifications and standards drawn up by European standards organisations.
The Need for Approximation
The need for approximation arises because the dismantling of tariff and quota barriers is not in itself sufficient to guarantee free movement. This is most clearly seen with regard to the movement of goods where (especially prior to the 1992 programme) many non-tariff and non-quantitative barriers have inhibited, even prevented, free movement across internal EU borders. These barriers have, in the words of the Treaty, the “equivalent effect” of tariffs and quantitative restrictions, and as such have been obstacles to the creation of a market based on free and open competition.
Moreover, they have tended to be barriers of a kind that cannot be removed simply by issuing general prohibitions. Many have taken the form of different national standards, national requirements, and national provisions and practices that have been adopted over the years. Sometimes they have been adopted for perfectly good reasons, but sometimes they have been adopted as a deliberate attempt to protect a domestic market from unwanted competition without actually infringing EU law. Whatever the intent, the effect has been the same: because of the need to adapt products to be subject to re-testing and re-certification procedures, efficiency has not been maximised, and producers in one member state often have been unable to compete on an equal basis with producers in another.
Examples of non-tariff barriers (NTBs) include different national technical specifications for products, different health and safety standards, charges for the inspection of certain categories of imported goods, and taxes that, though nominally general in their scope, have been discriminatory against imported goods in their effect.
EU Directives and the Removal of NTBs
Approximation is thus concerned with the removal of NTBs and is vital if free movement across national boundaries is to be achieved. EU directives are the main instrument for achieving approximation, although many Court rulings have also been supportive and helpful. Most approximation law is to be found in relation to the free movement of goods, although there is also an increasing volume covering services. Approximation law consists largely of the setting of common standards on such matters as technical requirements, design specifications, product content, and professional qualifications.