[ARCHIVED CONTENT] DTI - Europe & World Trade

The free movement of goods, persons, services and capital is a fundamental principle of the European Union. It is these four freedoms as set out in the EC Treaty, which form the basis of the Single Market.

The Government believes that the single European market benefits the economy of each Member State, and that the removal of trade barriers leads to a reduction in business costs as well as increasing competition and stimulating efficiency, benefiting consumers and encouraging the creation of jobs and wealth.

The legislative framework of the Single Market was largely complete by the end of 1992. However, there is an ongoing process of improvement, which involves proper enforcement of the rules, making sure regulations are easy to understand and apply, and strengthening the Single Market in certain sectors. The Lisbon European Council in March 2000 provided further impetus towards economic reform, highlighting the need to press ahead to enable Europe to compete effectively in the changing global market place.

The Single Market is a wider market for UK goods comprising nearly 380 million consumers and making up almost 40% of world trade. Such a huge market gives consumers greater choice.

The greater competition and liberalisation the Single Market has helped bring about has led to lower prices. Take air fares for example: cheap airlines such as Easyjet would not have been possible without the Single Market. Also airlines can now fly where they want, without national restrictions. This has helped British Airways become the second largest domestic airline in France.

The Single Market provides for better consumer protection; for example the Toy Directive means that all toys sold in the EU must be safe for children. Another example is the Fourth Motor Insurance Directive on which political agreement was reached by Member States in December 1998. This Directive will make it easier for those involved in motor accidents in other Member States to make an insurance claim when returning to their state of residence.

The Single Market principle of mutual recognition of standards means British manufacturers can sell their products all over Europe without expensive re-testing in every country.

For business there has been a significant reduction in export bureaucracy. The Single Market is in effect a domestic market for European business.

UK citizens have the right to work, study or retire in all the other Member States - there are around three-quarters of a million Britons living in other countries.

Since the creation of the Single Market, work to improve its operation and effectiveness has been ongoing. Priorities include improving implementation and enforcement of Single Market rules; lightening the burden of regulation on businesses; and liberalisation in areas such as utilities, services and public procurement. Nevertheless, there remain weak areas in the Single Market, due to non-implementation of some directives, or inadequate enforcement, or because better co-operation is needed between Member States.

In 2003, the Commission (DG Internal Market) published their Internal Market Strategy Priorities 2003-2006. The Commission want the Strategy to focus on bridging gaps in the Internal Market, particularly in the field of services. The Commission have since produced two annual reports - the First Report on the Implementation of the Internal Market Strategy in January 2004, and the Second Implementation report of the Internal Market Strategy in January 2005.

The Second Report forms part of an �Implementation Package� of three reports also including one on the Broad Economic Policy Guidelines and the Employment Guidelines, which will go to the Spring European Council 2005. The Second Implementation Report focuses on what stage of implementation the Strategy is at, and what else remains to be done, as well as an update on the Internal Market Scoreboard.

Priorities in the Strategy that the UK particularly support include liberalising the services sector (through further progress on the Services Directive); reaching agreement on the Community Patent, and trying to achieve synergies with other Community policies. The Commission see a strong link between strengthening the Internal Market and the Lisbon Agenda in order to raise competitiveness in the EU, and the UK support their attempts at trying to raise the profile of the Internal Market in this context.

Initiatives for simplifying national and Community rules include SLIM (Simpler Legislation for the Internal Market) and the European Business Test Panel which allows for consultation of business during the drafting stage of new legislation.

In addition, a framework for ensuring the even and effective enforcement of Single Market rules has been established. This involves encouraging co-operation between national administrations, setting up contact points for businesses and citizens, and improving the efficiency of the Commission�s complaints procedure. In the UK, the DTI�s Action Single Market acts only as a contact point for UK business and citizens.

The Commission�s Single Market Scoreboard has been an important tool in focusing the attention of European Union governments on speeding up the transposition of European directives into national law. It ranks the performance of Member States in terms of the number of directives not transposed by the due dates and also shows performance on infringement cases arising from those directives as applied in national law (here the UK record is a very good one).

By the first Scoreboard in November 1997, the UK had transposed 96.5% of Single Market directives and was ranked 2^nd in the transposition "league table". Subsequently, the UK's transposition performance was fairly consistent, fluctuating between 97.9% and 96.2%, and its position in the league table remained in the upper middle range (5^th to 7^th position) until 2001, when it dropped to 12^th position. By the Barcelona European Council in March 2002, following concerted efforts across Government Departments and the Devolved Administrations, the UK improved its transposition performance, achieving 98.7% and 3^rd place in the league table and meeting the 98.5% target set at the Stockholm European Council. It maintained its performance at around this level for the May 2002 Scoreboard (98.5% and 5^th place).

More recently in July 2004 we transposed 98.8% of Single Market Directives placing us third in the ''league table''. Our performance dipped slightly in the January 2005 Scoreboard, we had a placing of joint tenth and 97.5% of directives transposed, in the most recent Spring Scoreboard in March 2005 we improved slightly with 97.7% of directives transposed and we were one of only two Member States that managed to achieve the additional 0% target, set by the Commission, this is the number of directives that should be unimplemented two years after the transposition deadline.

A framework for ensuring the even and effective enforcement of Single Market rules has been established, involving encouraging co-operation between national administrations, setting up contact points for businesses and citizens, and improving the efficiency of the Commission�s complaints procedure. In the UK, the DTI�s Action Single Market acts not only as a contact point for UK business and citizens but also as a first port of call for similar units in other Member States when Single Market problems arise.

There are a number of options open to businesses when, in the course of marketing their products in another Member State, they consider that they have encountered trade barriers related to national regulations. This problem solving network seeks to enable businesses to exercise their Single Market rights and various options exist including:

making a confidential complaint directly to the European Commission, who may, where appropriate, take legal action against the Member State concerned (known as infraction proceedings). Guidance on how to contact the Commission can be found on their website at: http://www.europa.eu.int/comm

making a complaint to the Co-ordination centre, which can facilitate problem solving through various routes for example through bilateral discussion with its counterparts in the other Member State or through it�s extensive network of contacts across Whitehall. As mentioned above, the UK�s Co-ordination Centre is known as the "Action Single Market unit" and is located in the Department of Trade and Industry�s Europe and World Trade Directorate. Further information can be found on the website at: http://www.dti.gov.uk/europe/asm/09.pdf

Agreements between Member States on legislation and administrative co-operation measures to improve the single market are largely focused on the EU Council of Ministers and its various formations. Up until June 2002 Single Market dossiers were considered by the Internal Market Consumers and Tourism formation (although Telecoms and Energy were also important). Following the Seville European Council in June 2002 it was agreed to reorganise a number of Council formations and Internal Market dossiers are considered by a "Competitiveness Council" which brings together the Internal Market, Industry, and Research formations. The aim of the reorganisation is in part to create a stronger micro-economic Council in which the Lisbon economic reform agenda could be driven forward and competitiveness considerations in other areas could be underlined.

SOLVIT/Action Single Market

Celia Kissoon

Tel: 020 7215 2800
Fax: 020 7215 2234
Email: celia.kissoon@dti.gsi.gov.uk

Single Market/Competitiveness Council

Laurie Walker / Emma Smith

Emma Smith / Shirley Crump