Market Access and the Merits of This Approach - Essay Example

? Topic: 'Under the market access test, national rules which prevent or hinder market access are unlawful regardless of whether or not they actually discriminate against imports.' Using examples from recent case law, critically evaluate what is meant by 'market access' and the merits and problems of this approach in the area of free movement of goods. Article 28-30 of the EC Treaty explains the ambit and content of norms of free movement of products within EU by barring unwanted limits on intra-EU trade. By placing quantitative restrictions on imports, the member states may try to limit the flow of goods by measures that have an analogues’ impact to quotas. The main intention of the Articles 28-31 is to stop member states from involving in the quantitative restrictions. It is to be observed that Article 28 can be extended even when there is no discrimination. In the celebrated Cassis de Dijon case, ECJ held that Article 28 can nibble, where the rule prohibits the free flow of products within the EU subject to certain exceptions when the analogues’ rule extends to both imports and domestic products. Hence, discrimination is therefore, an adequate, but not essential, condition for the invocation of Article 28. Thus, the Article 28 can be said to be a mechanism for policing the periphery between the illegitimate and legitimate national regulation, and the nature of this border may well be challengeable. (Craig & Burca 2008:669). Article 34 of the TFEU pertains to Intra –EU imports and bars quantitative limitations and all initiatives having analogues’ impact between member nations. Immediately after the entry into force of the Lisbon Treaty, the EC Treaty has been altered and rechristened as the “Treaty on Functioning of the European Union.” (TFEU). The provisions of free movement of products got new numbering as Article 34-36 from that of 28-30. (Wolf & Stanley 2010:106). Article 23(9) stresses the free movement of products arising in the Member states and goods from third nations, which are in free movement in the Member States. By making EU as a region without internal borders, there has been removal of all barriers for free movement of product through calling off excise and customs’ duties, creating a common external tariff for the whole of the community, the quantitative limits on trade and equivalent steps. (Moens & Trone 2010:57). Market access can be regarded from the angle of both consumer and manufacturer. For the manufacture angle, free movement of their products helps to enter into various national markets with their sole aim of confronting local manufacturers in the country of import and the derivative aim of permitting economies of scale to be enjoyed. Market access may be a way to an outcome, the outcome being to exploit maximum revenue /turnover for the individual manufacturer and to improve the best possible distribution of resources for the EU as a whole. If Germans are given an opportunity to drink British beer, then some German may prefer it to the British product, than the local product and this is known as market access mechanism. For instance, an airline operating from any member states is having unrestricted and open access to any air routes within the EU as there had been removal of virtually all price and capacity controls. (Doganis 2006:13). Until the Keck and Mithouard case, the Court perused an analysis of the rule of free movement of goods that made liable any national law to an evaluation of proportionality analogues to cost/benefit evaluation. Due to this approach, any public regulation of the market would be under close watch, and this kindled deregulation of the market at the national level. (Shaw 2000:332). In Keck and Mithouard case, they marketed the products like Sati Rouge coffee and Picon beer in France at a price which is well below the wholesale-price or at a loss. There had been a bar in selling products at a loss under French law, prosecution against them was initiated. Keck and Mithouard defended that French law was incompatible with the Article 28 which denied them a scheme of sales promotion, which restrained the quantity of sales of goods imported into France. However, the EU court differed. (Cottier 2000:191). EU Court observed that the main aim of the French law was not to control the products that are being traded despite the fact such French law could destabilise the quantum of sales, which includes flow of goods from other member states. Further, the court observed that it wanted to cease the practice of merchants employing Article 28 to confront any bar on their liberty to market the products they desired and of what, where and when they wanted. The court further observed that due to an enhanced practice by the merchants in invoking the Article 28 of the Treaty as a mechanism of confronting any regulations whose impact is to restrict their commercial liberty, even in cases, where such regulations were not intended at products from other Member States, and the court regarded it is essential to review and explain its case law on this subject. It is to be noted that in Groupment National des Negociants en Pommes de Terre de Belgique v ITM Belgium SA and Vocarex1 also, the court had prohibited the practice of marketing products at a very low profit in another member state. The court also cited the case Commission v Italy, where the implication of the result would be contrasting if the law was intended to regulate trade in a member state2. (“Barnard 2007:307”). ECJ was of the view that prohibitions or restrictions on advertisement might be construed as a barrier to market access despite the fact that it being extended uniformly to all manufacturers. In De Agostini3 case and in Gourmet International4, ECJ identified the probable and real impacts of restrictive advertising regulations, particularly on cross-border market access. The Gourmet case may be poignant due to its implication that purely non-discriminatory initiatives forbidding market access may fall within the ambit of Article 28 EC despite the fact that the national measures’ impacts imported products asymmetrically.( Woods 2004:296). In Heimdeinst5 case, ECJ considered the bar on selling groceries on rounds without any permanent establishment in the same or adjacent municipality and where market access enriches traction in the ECJ’s reasoning. In this case, the ECJ still appears to signify that where market access is not excluded, a larger effect on imported products will be needed before Article 28 EC touches upon the national measure. (Toner 2004:199). In the case Cassis de Dijon, the legality of a German law that mandated the contents of spirit level for at least 25% was disputed before the ECJ. Due to German law strict alcohol stipulation, the French liquor Cassis de Dijon which contained about 15 -20 % could not be sold in Germany. It was argued before the ECJ that German minimum alcohol content requirement was an illegal non-tariff barrier to the trade. The German government argued that the validity of its law about alcoholic content is mainly on health grounds. The German government also cited the reason that its initiatives are meant to safeguard the consumers from unfair manufacturing and distributing practices of minimising the alcohol contents, mainly to shun paying higher taxes and to enjoy a competitive advantage. In its verdict, ECJ did not borrow the reason advanced by German government on health grounds. ECJ also turned down the notion of consumer protection justification advanced by the German government by applying the legal principle of proportionality. The ECJ commented that when alcoholic liquor which has been manufactured and sold in a member state should not be restricted for marketing in any other member state. (Alter 2009) ECJ has always been unsympathetic on discriminatory export or import restrictions. Thus, when export or import licences are bitten by Article 28 as held in International Fruit Company v Productschap Voor Grocenten en Fruit6, in Commission v French Republic7 and in Commission v Finland8. When imported products are subject to more stringent requirements when that is not inflicted on domestic goods, the ECJ usually interferes. In commissioner v Italy, ECJ was of the view that data requirements and procedures for the enrolment of imported cars, thereby making the registration procedures more complex and longer and more costly than that of domestic cars were barred by Article 28. In Bouhelier 9case, a French rule which enforced quality checks on watches to be exported where no such check is required for watches in the domestic market was in infringement of Article 29, which affects the free flow of goods. (Craig & Burca 2008:670). Thus, to sum up, ,in the celebrated Cassis de Dijon case, ECJ held that Article 28 can nibble, where the rule prohibits the free flow of products within the EU subject to certain exceptions when the analogues’ rule extends to both imports and domestic products. . The Gourmet case may be poignant due to its implication that purely non-discriminatory initiatives forbidding market access may fall within the ambit of Article 28 EC despite the fact that the national measures’ impacts imported products asymmetrically. ECJ has always been unsympathetic on discriminatory export or import restrictions, which are imposed by a member state. When imported products are subject to more stringent requirements when that is not inflicted on domestic goods, the ECJ usually interferes. Thus, with help of the above illustrated case laws, we can conclude that 'under the market access test, national rules, which prevent or hinder market access, are unlawful regardless of whether or not they are actually discriminate against imports.' List of References Alter, K.J. (2009) The European Courts Political Power: Selected Essays. Oxford: Oxford University Press Barnard, C. (2007). The Substantive Law of the EU. The Four Freedoms. Oxford: Oxford University Press Cottier, T. (2000) Regulatory Barriers and the Principles of Non-Discrimination. Michigan: University of Michigan Craig, P & Burca, G D. (2008) EU Law: Text, Cases and Materials. Oxford: Oxford University Press Doganis, R. (2006) The Airline Business. London: Routledge Taylor & Francis Group Moens, G & Trone, J. (2010) Commercial Law of the European Union. New York: Springer Shaw, J. (2000) Social Law and Policy in an Evolving European Union. Brussels: Hart Publishing Toner, H. (2004) Partnership Rights, Free Movement and EU Law. Brussels: Hart Publishing Wolf, S & Stanley, N. (2010 Wolf and Stanley on Environmental Law. London: Taylor & Francis Woods, L. (2004) Free Movement of Goods and Services within the Europe Community. New York: Ashgate Publishing Read More