European Union Membership - The Benefits

The Single (or “Internal”) Market is the result of the EU’s policies on trade, industry, employment and consumer affairs.  Since its launch on 1st January 1993, the Single Market has brought major benefits to businesses, consumers and employees alike. Some of the changes have been very noticeable - border controls have been abolished, cutting costs to business and speeding up the physical movement of goods and people across the Union.

Other changes have been less noticeable, but have made a real difference to people’s everyday lives. Standards have been harmonised for hundreds of products, producing a level playing field for manufacturers across the EU, regardless of where they are based.  And “mutual recognition” of goods produced in one member of the Single Market by all the others means that if a product is good enough to be sold in one country, it cannot be excluded from sale in another.  The overall effect has been to turn the EU into a “domestic” market for all citizens. 

The EU is the world's largest international single market.  Following the expansion of the EU on 1st May 2004, the Single Market now includes the 25 Member States and also the three European Free Economic Area countries - Norway, Iceland, and Liechtenstein.  Its population numbers around 460 million people – a bigger trading area than the US and Japan combined.

Single Market Achievements

In 2003, the Commission published an assessment of achievements during the first ten years of the Internal Market.  According to European Commission statistics, in broad terms, the  Single Market project has meant:

  • EU Gross Domestic Product (GDP) in 2002 was 1.8% higher (€164.5 billion) [£110 billion] than it would have been without the Single Market.
  • Over ten years, the Single Market has boosted the EU’s GDP by €877 billion [£588 billion]. This represents €5,700  [£3,819] of extra income per household.
  • EU Employment has grown (1992-2002) by 1.46% (an extra 2.5 million jobs) thanks to the Internal Market.  Up to 3 million British jobs are linked to exports to the EU, around ten percent of the total workforce.
  • Intra-EU trade has increased as a percentage of GDP from less than 25% in 1993 to 35% in 2005
  • Foreign direct investment in the Single Market has risen from €23 billion  [£15.4 billion] in 1992 to €159 billion [ £106.5 billion] in 2005.
  • 60 Million customs clearance documents per year no longer need to be completed, cutting bureaucracy and reducing costs and delivery times.

But it’s not just at the national level that we can see evidence of the Single Market making a real difference – evidence of the benefits for business, individual consumers and employees is also clear.

Greater competition

Much has been done to eliminate anti-competitive practices since 1993 – all thanks to the single market. The EU has been able to tackle many anti-competitive practices such as cartels, monopolies, and excessive and unnecessary regulation. For example:

An investigation into price fixing in the UK for replica football kits resulted in large price reductions and wider consumer choice;

Deregulation in the UK retail opticians sector, allowing entry and advertising, saw a significant rise in the number of new players in the market, improved product quality and consumer choice;

The price of books has fallen, thanks to the ending of the Net Book Agreement. Indeed the quantity of books and number of titles published increased, despite fears to the contrary.

Where Next For The Single Market?

In a global economy, markets never stay the same for long. So in turn, the Single Market has had to change, and continues to change, in response to new economic developments.  In the future, the Single Market has the real potential to help raise EU productivity and growth further. Work going on at the moment includes:

  • cutting back on unnecessary red tape and ensuring that new laws are not unduly burdensome;
  • creating a genuine pan-European market for energy;
  • extending the scope of anti discrimination laws; and
  • creating clear and effective rules designed to give consumers and business the confidence to trade across borders.

In terms of competition, there is a lot more that the EU can do together. Global competition is already here and firms cannot shelter behind tariffs or local monopolies. If the EU wants strong companies that deliver jobs, higher wages and high profits, they need to compete effectively by being productive and innovative. This is why the UK has strongly supported the European Commission in its work towards a “proactive competition policy”. This is about using competition policy to make markets work – so they bring about productivity gains and innovation, rather than its more traditional role as a “policeman” of anti-competitive measures i.e. illegal cartels. This way, competition policy will further increase Europe’s competitiveness globally and promote long term economic growth.

Contact:

Response Centre
Tel:020 7215 5000  
or :020 7215 6740 (Minicom)
Fax:  020 7215 0105
email: dti.enquiries@dti.gsi.gov.uk