Comprehensive Notes on the EU Single Market and Economic Integration

The EU Single Market

  • Overview
    • Consists of the 27 EU member states and partially Norway, Iceland, and Liechtenstein (via the European Economic Area) and Switzerland (via bilateral agreements).
    • The United Kingdom does not have access post-Brexit.
    • As of 2021, the GDP of the Single Market was €14,522 billion and it supports 56 million jobs across 23 million companies.

Types of Economic Integration

  • Free Trade Areas (FTA): Member states (MS) eliminate trade barriers among themselves while retaining individual trade policies with non-member states.
  • Customs Unions (CU): Combines FTA advantages with a shared external trade policy towards non-member states (e.g. MERCOSUR).
  • Common Markets (CM): Adds the free movement of persons, services, and capital (e.g. EFTA).
  • Monetary Union (MU): Involves a shared currency on top of CM (e.g. CEMAC).
  • Economic Union: Combines MU with a unified monetary and fiscal policy (e.g. EU).
  • Complete Economic and Political Integration: Involves significant integration, including foreign and security policies, social security systems, and taxes under a central authority.

Free Movement Principles

  • Free Movement of Goods: Ensures products can be traded without tariff barriers within the EU, governed by Article 26 (2) TFEU.

    • Definition of Goods: Includes all products that can be bought or sold and must cross borders for trade.
    • Prohibitions against unjustified taxation and restrictions (Art 30 and 110 TFEU).

  • Free Movement of Services: Allows service providers to operate across EU member states.

  • Free Movement of Persons: Ensures workers can move freely between member states for employment purposes, fostering economic opportunity.

  • Free Movement of Capital: Allows for unrestricted flow of capital investment across member states, crucial for business operations.

EU Competition Law

  • Regulations: Governed under Article 101 (cartels) and Article 102 (abuse of dominance) TFEU.
  • Significant Cases: Google faced a €2,424,495,000 fine for abusing its dominant position in search engines to favor Google Shopping.

Internal Market and Trade Policies

  • Objective: To support sustainable development and competitiveness within the EU while promoting innovation and environmental protection (Art 2 (3) TEU).
  • Governance: Shared competence between member states and the EU concerning the internal market (Art 3 and 4 (2) TFEU).

Harmonization Efforts

  • Positive Harmonization: EU adopts Regulations and Directives to bring about a functioning internal market (Art 26 (1) TFEU).
  • Negative Harmonization: Prohibition of customs duties and similar levies across borders to ensure fair trade (Art 30 TFEU).

Taxation within the Internal Market

  • Principle: Member states have autonomous taxation policies but must treat similar products equally (Art 110 TFEU).
    • Example cases illustrate the need for similar treatment of products to prevent protectionism.

Trade Agreements Post-Brexit

  • EU-UK Trade and Cooperation Agreement: Ensures zero tariffs and quotas for goods that meet specific conditions.

  • Rules of Origin: Crucial for determining the trade status of products, ensuring that they meet origin requirements for tariff-free access.

  • Northern Ireland Protocol: Part of the Windsor Framework, deals with customs arrangements between Great Britain and Northern Ireland, ensuring no tariffs apply within the EU customs territory.

  • Guidelines for Exporting: Businesses must navigate several requirements, including obtaining EORI numbers, ensuring compliance with rules of origin, and proper customs declarations to maintain tariff exemptions.