Economic and Political Integration in the EU - Essay Example

E C Law Table of Content Serial Number and Topic Heading Page Number 0 Introduction 02 2.0 Executive Summary 04 3.0 Analysis 05 3.1 The Free Movement of Persons in EU 05 3.2 The Free Movement of Goods in EU 06 3.3 Competition within EU 09 4.0 Conclusion 10 5.0 References 11 1.0 Introduction Economic and political integration has been a basic fact of European life for more than fifty years and will probably remain so in future as well. Three solid historical accomplishments can be attributed in part to this integration. One, is the economic growth and welfare they gain through integration; second, the extension and reinforcement of a democratic government practiced by all union states within the integrated Union, and finally, peace. The war between the former European powers has gone and is now replaced by a law of mutual acceptance and growth. This perhaps, can be termed the greatest single accomplishment the integration of European States has accomplished (John Gillingham, p.xi, Preface, 2003). Since its inception in the 1950s, the integration of the States in Europe has witnessed changes that can be best described in four parts. The first of course was the founding of the European Economic Union (EEU). The second was the witness of regime change; the emergence of a liberal substitute wherein the state was harnessed by a common economic rule. The third, thanks to globalisation, saw the revival of economic liberalism as a doctrine, and the fourth; saw during the final decade of the century, the integration process of states suffer a series of eventually correctable setbacks that still peril the Union (John Gillingham, p.xiii, Preface, 2003). The European Union is unique among international organisations, in that, it has a complex yet well developed system of law, directly affecting its member states. The EU constitutes a law that draws mutual social and economic benefit of the member states. European Union law has come a long way since its inception over the past 50 years. As of today, the EU has around 500 million citizens in 27 member states bound together by this law, making it one of the most encompassing and dynamic modern legal systems in the world (Wikipedia, 2007). It all started when, the heads of the member States of Belgium, Germany, France, Italy, Luxembourg, and Netherlands, agreed to lay the foundation of an ever closer union among the European Union members1. These included: The economic and social progress of its member states through a common action to eliminate barriers Improving the living and working conditions of their people A concerted action to guarantee steady expansion, trade, and fair competition Strengthening unity and development by reducing the differences between the various regions and less favoured regions Contributing to the progressive abolition of restrictions on international trade Confirming solidarity with overseas countries to ensure their prosperity, in accordance with the principles of the Charter of the United Nations Preserving and strengthening peace and liberty, and calling upon other Europeans to join in their efforts Development of knowledge through education and continued upgradation Creation of an economically and socially developed European Community (Europa, 2005) The nature of the EC Treaty ensures that unelected individuals have had a greater impact on the development of EC Law than elected officials. This paper takes a look at three prominent laws that regulate the free movement of goods, people, and competition. 2.0 Executive Summary The free movement of persons between the Member States of the EU was at one time restricted to only the working class. This however changed with the economic development of all member states within the EU, and all people, citizens, students, dependents, and others who were no longer economically active were allowed to travel to any country in the EU and reside there if they wished. Since the integration of the Schengen Acquis into Community law, free movement of people and goods came into being. The interpretation of free movement is one of unrestricted movement across all internal borders of EU nations without undergoing checks. This could however convince the security bosses that the Union's security is at risk. While formulating such a move, the Union made it mandatory that any member country that had external frontiers, boundary The Schengen Convention recognized these concerns and ordered those countries with 'external frontiers' to ensure proper checks and effective surveillance. Otherwise, it would become close to impossible to check illegal immigration, drug smuggling and other unlawful activities (Europa, 2005). One of the founding principles of the EC is the Free Movement of Goods within the EU states without prejudice, mandated by EU Articles 25-30. As there is a distinction between the type of goods that can move freely within the union and those that amount to barriers to trade; intellectual property (IP), there could be a problem legally. If ownership of IP of a product (a trademark or a patent) is allowed to control the movement within its territory, then there is every chance of barrier to trade. If it does, then EC law obliges the member state to take steps to remove the barrier. In addition, if the Treaty article on free movement of goods has a direct effect2 on his/her business, the person can seek legal action under EC law in the national courts (K-Zone, 2006). Competition is essential for introducing quality and selection. However, the EU has laid down certain rules that prohibit undue undercutting or over-quoting to take advantage over other EU partners in business. The raison d'tre of the internal market allows firms to compete on a level playing field in all the member states, and its policy of competition encourages economic efficiency through innovation and technical progress. This is seen as a move to protect the interests of European consumers, and at the same time, ensure that European goods and services are competitive on the world market (Europa, 2004)3. 3.0 Analysis 3.1 The Free Movement of Persons within EU: With the expansion of the EU group came another problem, the problem of internal security. The 80s witnessed EC Member States in a debate on whether border checks between countries should be restricted to only a few, or should it be eliminated completely. The thought that free movement could be applied to EU member citizens, leaving those visiting the Schengen countries from outside the community subject to passport and visa checks at each national border was debated for long. However, there was a problem. The EU didn't want to be seen discriminating against visitors who were on a visit for pleasure and business. A handful of Member States opted to push ahead and, independently of the European Community, create an area without internal border controls. Belgium, Luxembourg, and the Netherlands had already established a common passport area in 1970. The other member countries were initially reluctant to follow this move. However, protests by truck drivers upset by border-crossing delays between France and Germany instigated a more serious review of their free movement policy. Pressure from member states brought the two countries to the negotiation table and they signed a bilateral agreement in 1984 to eliminate controls along their common boundary. In 1985, France, Germany, Belgium, Luxembourg, and the Netherlands signed the Schengen Agreement. The agreement to abolish all passport and other cross-border checks between the participating countries was put up. They all recognized a single external border for security purposes. However, the provisions of the agreement were not put in place until a later date. While the original intent of eliminating border controls was to facilitate the movement of citizens from these participating countries, it was not possible to eliminate border checks for these travelers while still maintaining checks for travelers from outside countries. Therefore, the concept of free movement was expanded to allow free travel of visitors within the Schengen area. This rule however needed careful coordination on who would be admitted through external borders to travel freely within the Schengen area (Julia Gelatt, 2005). The reason for relaxing passport and cross-border checks were in keeping with the EU initiative to make for free movement of person within the EU. With so many persons traveling between member countries every day, the process of screening was laborious and time consuming. Also the fact that since the countries had agreed to the free movement of goods between these countries, they couldn't allow the waste of precious time for border checks. The member states believed that by having an open policy within the EU states, they ran little risk of national security. Only the external border to any member country was to be used for passport, visa, and security checks. Once they were cleared, all member countries could accept them without further scrutiny. 3.2 The Free Movement of Goods within EU: The importance of the principle of free movement of goods appears from the fact that it was placed at the beginning of the Treaty establishing the European Community; Articles 23-31.This treaty also applies to the free movement of goods between the EU Member States, and Norway, Iceland and Liechtenstein, the three states that signed the Agreement on the European Economic Area (EEA). The Treaty on free movement of goods was provided for hassle-free movement of goods within the EU Internal Market. In order to make this possible, all member countries had to prohibit customs duties and charges with similar effect. We saw in the earlier chapter that all quantitative import restrictions and measures with a similar effect were also removed (Article 28). With certain exceptions, all regulations on trade issued by Member States that could form an obstacle to trade in the Internal Market would be regarded as prohibited measures. Having considered these measures, a product set up for sales may be on the national market in a member state may be prohibited or restricted, if it comes under exceptional or strict conditions, such as protecting public health, the consumer or the environment (Ministry of Trade and Industry, 2006). In order to give the EU member companies the benefit of local market exposure, the law under the treaty signifies the movement of member state products within the EU. If a product is imported and sold within the EU, it has to go through a lot of red-carpet scrutiny and undergo strict customs duty evaluation first, and then pass through an essential commodity classification to be up for market access. The EU also makes it mandatory that any product that moves within its market must be competitively priced and is not harmful in any way to man, and environment. This rule can be seen as discriminating foreign products. Article23-Free Movements of Goods The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries. The provisions of Article 25 and of Chapter 2 of this title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States. Article24 Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State. It is also statutory that the member state has not in any way benefited from a total or partial drawback of such duties or charges (Europa, europa.eu.int). 3.3 Competition within EU: Competition within EU market is ensured to be healthy and not hindered by restrictive agreements and concerted practices. In an attempt to encourage local products to foreign ones, the EU makes it mandatory that there are no attempts to impeach weaker companies by their more contemporary powers houses. The EU also seeks to prevent member states' governments from distorting competition. Article 3(g) of the EC Treaty, ensures that competition in the internal market is not distorted. This criterion draws a line between the scope of application of the rules on competition laid down by the Treaty, and that of national rules on competition. In practice the question of what affects intra-Community trade is interpreted broadly by the Commission and the Court of Justice. Consequently, the coexistence of Community and national competition law sometimes causes the two to be applied simultaneously. The requirement that there must be an effect on trade between Member States also serves to determine the scope of application of Community competition rules with respect to non-Community countries. European competition law can be applied to agreements or conduct of parties established outside the European Union if such agreements or conduct restrict competition in the common market and affect intra-Community trade (Ministry of Trade and Industry, 2006). 4.0 Conclusion The principle of free movement of goods is one of the major cornerstones of the EU integration plan. The principle implies that national barriers to the free movement of goods within the EU will be abolished to permit equality of exposure and market reach. Many such barriers have been lifted through Community harmonisation, such as in the field of vehicles, pharmaceuticals, chemicals, construction products, and so on. Another important cornerstone is the removal of people within the EU. This has improved the economic well-being of all member state citizens. Not to discriminate others, the Schengen signatories have also done away with passport and security checks for foreigners visiting any country within the EU. All member countries that share an external boundary with other non-EU countries must able to scrutinise foreigners at check posts outside their national border before allowing them entry. As for competition, the EU has always maintained their desire to encourage internal markets, rather than external. In order to maintain a balance, no undercutting or over-quoting to take advantage over other EU partners in business is ordered. The raison d'tre of the internal market allows firms to compete on a level playing field in all the member states, and its policy of competition encourages economic efficiency through innovation and technical progress 5.0 References 1.0 John Gillingham, European Integration 1950-2003, Superstate or New Market Economy Cambridge University Press, 2003 2.0 Wikipedia, European Union Law, http://en.wikipedia.org/wiki/European_Union_Law#_note-0 3.0 Europa, http://europa.eu.int/eur-lex/en/treaties/dat/C_2002325EN.003301.html 4.0 Europa, Freedom, Security and Justice, http://ec.europa.eu/justice_home/fsj/freetravel/fsj_freetravel_intro_en.htm 5.0 The K-Zone, Free Movements of Goods, and intellectual property, http://www.kevinboone.com/lawglos_FreeMovementAndIntellectualProperty.html 6.0 Europa, Competition, Europa, Competition: Introduction, http://europa.eu/scadplus/leg/en/lvb/l26055.htm 7.0 Julia Gelatt, Migration Information Source, Migration Fundamentals, http://www.migrationinformation.org/Feature/display.cfmid=338 2005 8.0 Ministry of Trade and Industry, Free Movements of Goods, http://www.ktm.fi/index.phtmll=en&s=94 2006 Read More