EU Law Free Movement of Goods

1. EU LawFree Movement of Goods Jane Winn Tom Daemen February 10, 2009

2. Administrative Matters • Homework feedback: distinguish conflicts between states in free trade area with conflicts between national regulators and regulated industries • Kelemen on Rules of Federalism (optional)

3. Free Movement of Goods • Steps to Economic Integration: Theory & Practice • Quotas & Tariffs; Measures Equivalent to Quantitative Restrictions (MEQR) • Scope of Free Movement of Goods • Dassonville • Commission v. Denmark • Selling Arrangements versus Trade in Goods • Keck

4. Steps to Economic Integration: Theory & Practice • Free Trade Area • List of free trade areas • http://en.wikipedia.org/wiki/Free_trade_area • List of bilateral free trade agreements • http://en.wikipedia.org/wiki/List_of_bilateral_free_trade_agreements • Customs Union • List of customs unions • http://en.wikipedia.org/wiki/Customs_union • Common Market • List of common markets • http://en.wikipedia.org/wiki/Common_market • Economic Union • List of economic unions • http://en.wikipedia.org/wiki/Economic_and_monetary_union • Katzenstein, P. J. (1985). Small States in World Markets: Industrial Policy in Europe. Ithaca, NY, Cornell University Press. • Small states band together for self-preservation under conditions of globalization

5. Common Market: Four (Economic) Freedoms • Free movement of goods • Majority of internal market trade • Free movement of persons • Freedom to seek employment in another member state on same basis as citizens of that country • 1990 Schengen Accord: remove internal frontier controls • Maastricht Treaty introduced EU citizenship • Free movement of capital • Slower implementation than other freedoms • Free movement of services • Cross-border financial services • Right of establishment of professionals (doctors, dentists, insurance agents)

6. Progress toward Four Freedoms • Treaty of Rome 1957 • 1958 President de Gaulle in France, opposed to economic union • Veto accession of UK 1963 • 1965 de Gaulle walked out of negotiations, returned in 1966 under “Luxembourg Accords”: no vote if one state objects, stifling new legislation for more than a decade • ECJ not affected… • Late 1970s-early 1980s recession & Jacques Delors broke stalemate • Single Europe Act came into force 1987 (qualified majority voting for Internal Market matters) • Complete Internal Market, Secure Four Freedoms by 1992

7. Quotas and Tariffs • No quotas on trade between member states permitted Article 28 • Example Multi-Fibre Agreement 1974-2004 • Temporary structural adjustment measures • Customs union: common external tariff, no internal tariffs Art 25 • Applies to goods that originated in EU or that entered EU lawfully • What about administrative fees charged at the border for processing? • Does not apply to member state taxes that apply to domestic and imported products equally • Applies to member state actions, not actions by private parties

8. U.S. Harmonized Tariff Schedule

9. Measures Equivalent to Quantitative Restrictions (MEQR) • Member states are permitted to restrain imports on the grounds of: • Public morality, policy, security • Protect health and human life • Protect national treasures • Protect IPR • MEQR assessed based on effects, not intent behind legislation

10. Selling Arrangements v Trade in Goods • US: Robinson-Patman Act • Regulates price competition between small retailers and large chain stores that can negotiate bulk discounts • France: Prohibition on resale at loss by distributor • Protect small retailers from competition from large retailers with lower overhead by prohibiting use of “loss leaders”