# EUR-Lex - 52014DC0025 - EN

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# 52014DC0025

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE A vision for the internal market for industrial products /* COM/2014/025 final */**

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COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE

A vision for the internal market for
industrial products

(Text with EEA relevance)

1.           Introduction

In 2012, the Union celebrated the 20th anniversary of the single market ensuring the free movement of
goods, services, people and capital within the European Union (EU). The
objective of this Communication is to formulate a number of recommendations for
the legislation on the internal market for industrial products and to set out a
broader vision for the next decade. It will be transmitted to the European
Council, as requested in its meeting of 14 and 15 March 2013.

Strengthening
the effectiveness of the internal market for industrial products was identified
as a priority in the October 2012 update on an Integrated Industrial Policy[1]. This proposed the re-industrialisation of the EU, based on a
four-pillar strategy, one of which is improving access to markets.

The European
Commission therefore carried out an evaluation of EU law in the area of
industrial products to assess the regulatory framework’s overall coherence and
‘fitness for purpose’ and to develop an evidence base on the cumulative
regulatory effects from an industry perspective. In parallel, the Commission
organised a public consultation of stakeholders. This Communication builds on
the results of the evaluation and the public consultation and analyses the
regulatory environment of the internal market for industrial products. The detailed
results of the evaluation, the public consultation and a number of case-studies
are set out in the accompanying Commission Staff Working Document.

The internal
market for products has been a frontrunner in EU economic integration.
Regulatory obstacles within the Union are prevented by Directive 98/34/EC[2] or eliminated through the principle of mutual recognition, or
through Union harmonisation legislation. The objective of this legislation is
twofold, first ensuring that products placed on the European market guarantee
high levels of protection for health and safety and the environment and
secondly, ensuring the free movement of products by replacing national rules
with a single harmonised set of conditions for placing products on the internal
market so that these can circulate freely.

The focus of
this Communication is on industrial products i.e. non-food products
manufactured through an industrial process[3].
It covers a wide range of products such as different types of machines, radio
equipment, electrical and electronic devices, toys and many others. The EU acquis
for industrial products has gradually expanded, and today there are more than
30 directives and regulations[4];
both those covering specific industrial products (e.g. pressure equipment, gas
appliances) and those that apply horizontally across many different product
groups, such as REACH (chemicals) and the Ecodesign Directive.

Union
legislation that has recently been subject to major revision, in particular the
legislation on medical devices, cosmetics, construction products and on
consumer product safety and market surveillance is not addressed by this Communication.
Chemical products and motor vehicles are also outside the scope of the analysis
since the Union legislation in these sectors has recently been evaluated or
subjected to a regulatory fitness check. Finally, pharmaceuticals are left
aside because of their very specific nature.

2.           What are the benefits of
the internal market for industrial products?

Since the Single
Market became a reality in 1993, intra-EU trade in goods has grown as a share
of GDP by around 5 percentage points. Intra-EU trade represented around 17% of
EU GDP in 1999 and close to 22% in 2011. Furthermore, intra-EU trade represents
a very high percentage of GDP in most Member States.

Figure 1 – Evolution of intra-EU trade in goods as share of EU GDP,
1999-2011 (average of export and import) - Source: Eurostat

The evolution of
intra-EU trade in the three broad categories of industrial products according
to the SITC classification (Machinery and transport equipment, manufactured
products classified by material and other manufactured products) has exceeded
the growth rate of total EU manufacturing value added between 2000 and 2012
(see chart below).

Figure 2 - Evolution of intra-EU trade (exports, 2000=100) in
selected manufacturing sectors in relation to manufacturing gross value added -
Source: Eurostat

While there are
significant differences between the sectors covered by Union harmonisation
legislation on industrial products, most have experienced an increase in the
level of intra-EU trade, particularly between 2003 and 2008. Although three
sectors have shown a fall in the level of intra-EU trade since 1999 (i.e.
office machines and automatic data processing, metalworking machinery and
photographic apparatus), much of this can probably be attributed to the onset
of the economic and financial crisis in 2008, but also to other dynamics
linked, for example, to the emergence of smartphones and tablets.

Figure 3 - Evolution of intra-EU trade in selected manufacturing
sectors (value of imports; 1999=100) - Source: Eurostat

Source:
Eurostat

Better access to
the internal market and global markets has led to greater economies of scale
and scope and thus enhanced firm-level competitiveness and cost-efficiencies
through regulatory and product convergence at European level and, to some
extent, also globally. Prior to the establishment of the single market, each EU
Member State imposed obligations on business in the interests of safety, health
and consumer protection. This meant that there were considerable regulatory
barriers to trade in products because of the different rules and requirements,
meaning that businesses had to treat each EU Member State as a separate market
and offer different products.

Doing business
on a cross-border basis in this operating environment imposed considerable
regulatory compliance costs on businesses. The adoption of successive vertical
and horizontal Union harmonisation legislation therefore directly addressed the
needs of European industry.

In some
instances, no national rules were in place prior to the adoption of EU
legislation which addressed regulatory gaps, thereby enabling businesses to
develop a larger market for their products, while ensuring high levels of
product safety and protection. For instance, until the adoption of the
Machinery Directive[5]
in 1989, many national legal frameworks did not adequately regulate the safety
and usage of electrical and mechanical machinery, despite the high level of
risk involved for those operating such machinery. In these sectors, EU
legislation largely preceded the development of national legislation thus
preventing the emergence of different national regulations which would
otherwise have led to market fragmentation, obstacles to the free movement of
products and to higher administrative burdens for regulatory compliance.

The
approximation of product legislation through internal market legislation has
been relevant in promoting industrial competitiveness because regulatory
convergence at EU level supported by voluntary technical standards, has
promoted access to new markets within the internal market and led to fairer
competition and a level playing field among economic operators. Union
harmonisation legislation also strengthens competitiveness in other ways, e.g.
through effects on global regulatory and product convergence, enhanced take-up
of innovation and RTD results (through a technology-neutral approach), the
promotion of industry consolidation leading to even greater economies of scale
with manufacturing firms capable of operating across the internal market and
beyond.

3.           The evolution of Union
Law on industrial products

3.1.        The EU only regulates the
essential elements...

Since 1985, the Union has applied a unique mechanism for harmonised product legislation: the Union
legislator lays down the “essential requirements” in respect of safety, health
and other public interests that businesses must comply with when putting
products on the Union market. The fundamental principle is that businesses need
to demonstrate that they have complied with the essential requirements set out
in Union harmonisation legislation, possibly with the help of harmonised
standards developed by the European standardisation organisations. The products
could then be sold everywhere in the internal market.

The so-called
‘new approach’ to product regulation has considerably reduced divergence in
national technical regulations on products and has brought about a single,
borderless market for harmonised industrial products. It lowered market access
barriers for industry and made it easier for businesses to operate in
pan-European markets. The internal market in industrial products has brought
about economic and employment benefits, through its contribution to increased
EU-trade. As such, it is widely recognised as one of the EU’s major success
stories.

3.2.        ...with and for people,
businesses and Member States...

The European
rules on industrial products rely on the invaluable input of several important
groups of actors:

· 
Manufacturers and other businesses in the supply chain are expected to take the necessary steps to
make their products comply with the legal requirements. Manufacturers must
follow the various conformity assessment procedures while at the same time –
mainly through the industry associations – they can participate in the
development of technical standards and monitor the implementation of the
legislation. Other relevant stakeholders – e.g. consumer, environmental
groups and trade unions – also participate very actively in this process.

· 
A number of mechanisms and structures that
underpin the implementation of Union harmonisation legislation are the
responsibility of the Member States. Member States are responsible for
the development of national implementing rules and for designating competent
conformity assessment bodies, the so-called ‘notified bodies’ – including
determining whether accreditation mechanisms are required and for monitoring
the operation of notified bodies. They also support and guide businesses to
ensure effective implementation, market surveillance and enforcement.

· 
At EU level, the Commission has an
important overarching role in monitoring and evaluating the implementation of
Union harmonisation legislation on industrial products, in assessing the scope
for possible regulatory changes and pursuing possible breaches of EU law. The
Commission is also responsible for requesting EU standardisation bodies to
develop technical standards in support of legislation, in accordance with the
priorities identified in the Union’s Annual Work Programme on standardisation[6]. Successive European
Research framework programmes have contributed to the development of standards
for technologies and products which will be continued in the Horizon 2020
Programme.

3.3.        ...but does not shy away
from profound reforms where needed

The Union
legislation on industrial products sets out the main requirements for
businesses. Examples of these are the CE marking indicating product compliance
with EU legislation and the obligatory steps to be taken before a product can
bear CE marking, such as producing a declaration of conformity.

Although in
principle the administrative requirements for businesses are clear (CE marking,
declaration of conformity, self-certification or third party conformity
assessment depending on the type of Directive or Regulation and level of safety
or other risk involved), in practice, anomalies and differences between EU
legal texts have emerged. This is partly due to the fact that the overall
volume of legislation has increased, and the fact that individual pieces of
legislation have evolved independently. For instance, the requirements for
declarations of conformity varied between Directives, both in relation to the
information that had to be provided, and whether the declarations of conformity
had to be placed together with the product or could be in the accompanying
manual alone.

There was therefore
an urgent need to standardise and ensure greater consistency in terms of requirements
for businesses and national authorities. Since 2009, the Union legislation on
industrial products underwent sweeping reforms to eliminate unnecessary inconsistencies
between various pieces of Union harmonisation legislation and help minimise the
burdens placed on businesses:

· 
More than fifteen different proposals for the
revision of directives on a wide range of industrial products, varying from
toys to cableway installations[7],
will have been proposed and/or adopted during the period 2009-2013. Most of
these new directives and regulations will have to be transposed or applied by
2015, at the latest.

· 
The Construction Products Regulation[8] was
adopted in 2011 and started applying in 2013.

· 
The Standardisation Regulation[9] was
adopted in 2012 and started applying in 2013.

· 
In addition, two horizontal legislative
proposals for regulations on market surveillance and consumer product safety
were tabled and are expected to be adopted by the European Parliament and the
Council in 2014.

· 
Preliminary analysis indicates that stakeholders
seem to be satisfied with the current Union rules on machinery and toys.
The Commission will however launch an evaluation of the Machinery Directive in
2015 and, on the basis of input from Member States and all interested parties
in 2014, will examine if the rules on toy safety should be made more effective.

· 
The principle of mutual recognition is
one of the pillars of the internal market and is, in the field of industrial
products, organised in the ‘Mutual Recognition Regulation’[10]. In line with the
Council’s conclusions from December 2013[11],
the Commission will launch an evaluation of the functioning of the principle of
mutual recognition and report back to the Council in 2015.

4.           Review of Union
Legislation on industrial products

A thorough and
independent assessment of the day-to-day functioning of the Union legislation
on industrial products looked at its impact on businesses, national
administrations and other stakeholders. The overall conclusions is that
internal market legislation is relevant to meeting EU objectives relating to
the need for technical harmonisation measures with high levels of protection
for health and safety and consumers and, to the environment. The Internal
Market legislative framework has also in built responsiveness to adapt to
change.

However, the
assessment and the public consultation identified a series of problems or
points for improvement and led to a number of recommendations. These
recommendations synthesising the views of the stakeholders and the independent
evaluation of the legislation are the following:

4.1.        Improving the architecture
of Union harmonisation legislation

(1) 
Regulations rather than directives should be the preferred instrument for implementing Union
harmonisation legislation. This would eliminate differences in the timing of
national legislation entering into force across the Union, and reduce the risk
of divergent transposition, interpretation and application. The feasibility of
this approach should however be confirmed on a case-by-case assessment taking
into account the objectives of better regulation as well as the principle of
subsidiarity. After a positive analysis, the Commission has for instance
proposed a regulation in the field of radio equipment[12].

(2) 
Periodic reviews
should be undertaken of Union harmonisation legislation for industrial products
to ensure that the regulatory framework is consistent, and that there are no
major gaps, inconsistencies, regulatory burden that could be reduced or
duplication either in the legislation itself or between different pieces of
Union harmonisation legislation for industrial products. Such reviews should
take place regularly to ensure that legislation remains up to date, is
sufficiently achieving its objectives and reflects industry developments and
product innovation.

(3) 
A horizontal regulation based on Decision
768/2008/EC should be considered, setting out
common definitions and other common elements that apply across Union
harmonisation legislation. Such a regulation would bring additional coherence
to Union harmonisation legislation.

(4) 
Regular update of non-binding guidance on
complying with Union harmonisation legislation such
as “The ‘Blue Guide’ on the implementation of EU product rules”[13] should be carried out.
Where possible, the guidance should give insight into the rationale for
particular requirements or standards.

(5) 
In a number of areas within professional
products, the legislation applicable at the use phase (e.g. installations,
maintenance) laid down at national level imposes additional barriers that
reduce the benefits of harmonised legislation. While such aspects are outside
the scope of Union harmonisation legislation for industrial products itself,
the development and provisions of this legislation should take such aspects
into consideration aiming to minimise any obstacles to the extent possible.

4.2.        Strengthening the
effectiveness of the regulatory framework

(6) 
The Commission should give further consideration
to ways of strengthening the participation of SMEs and civil society
stakeholders (e.g. consumer associations and associations of professional
users) in the preparation of initiatives for EU legislative action and in standardisation
processes. One possibility would be to ensure that SME-focused industry
associations are better represented in working groups on specific Union
harmonisation legislation for industrial products, with support provided for
their participation costs where possible.

(7) 
National standards organisations should be
encouraged to make abstracts of harmonised standards available free of
charge on their websites. Manufacturers, particularly SMEs, may not
necessarily know in advance precisely which standards they require. Making
abstracts freely available would reduce time and costs incurred in purchasing
inappropriate standards.

(8) 
There should be a faster transition towards
“e-market surveillance” in which economic operators make compliance
information available online as far as possible. More sensitive technical
documentation and data requested by market surveillance authorities could be
transferred electronically via secure data transmission. This would promote
more efficient ways of ensuring transparency and two-way provision of
compliance information and data between market surveillance authorities and
businesses.

(9) 
In order to facilitate the transition towards
a paperless future for market surveillance, market surveillance
authorities (and, where appropriate, customs authorities) should be equipped
with scanning equipment or smart phone readers that would link through to the
compliance section of the economic operators’ website or to a dedicated
standalone website. This is subject to resources being identified and requires
joint investment by industry and market surveillance authorities.

(10) 
Businesses should be given greater flexibility
on meeting traceability requirements in order to promote greater use of
e-labelling. This would help to alleviate the major concerns that
businesses have with regard to current traceability requirements for products
and packaging to provide full addressee information. These are seen as
unnecessary, as well as detracting from product aesthetics and industrial
design. E-labelling provides a viable alternative route to meeting the same
requirements.

(11) 
When a currently non-harmonised product group
becomes part of a harmonised product group, consideration should be given as to
whether it is possible to integrate new product groups in existing pieces of
Union harmonisation legislation for industrial products, rather than
proposing new legislation. A good example in this regard was agricultural
machinery for spreading pesticides, which was incorporated into the Machinery
Directive.

4.3.        Strengthening the
implementation regime for Union harmonisation legislation

(12) 
The mechanisms to facilitate cooperation and the
exchange of information between market surveillance
authorities and the Commission such as RAPEX[14]
and ICSMS[15]
should continue to be supported. EU coordination and support actions relating
to market surveillance through the ‘Product Safety and Market Surveillance
Package’[16]
are critical and should be maintained in coordination with market surveillance
authorities aiming for the most efficient use of resources.

(13) 
The use of accreditation should be further
strengthened through a consistent approach in the
regulated area in line with Regulation (EC) No 765/2008[17].

(14) 
Synergies should be fully exploited between
different structures in the implementation regime
of the Union harmonisation legislation for industrial products. Greater
synergies are needed between SOLVIT which solves general problems relating to
the non-functioning of the internal market, the Enterprise Europe Network, helping
SME to benefit from opportunities in the internal market and Product Contact
Points, which have more specialised knowledge about non-harmonised product
legislation. For instance, there could be referrals of cases between SOLVIT, Enterprise
Europe Network and Product Contact Points. The possibility of using the
Internal Market Information System[18]
for linking up national Product Contact Points should also be investigated. Staff
working at the different structures could be made better aware of coordination
mechanisms and contact points for industry that specialise in issues relating
to the internal market in industrial products.

(15) 
The role of the Product Contact Points
set up by the Mutual Recognition Regulation[19]
should be expanded to harmonised products to provide a first point of contact
for firms. Many firms don’t know who to turn to and there is a low level of
knowledge among some smaller firms and micro enterprises about internal market
legislation, and even whether harmonised or non-harmonised legislation applies
to their product. This would both strengthen the visibility of Product Contact
Points and provide SMEs with a clear information source.

4.4.        Reducing administrative
burdens for businesses

(16) 
 As all products need to meet the legal
requirements concerning safety, health and other public interests, there is only
limited scope for SME exemptions from the legal provisions in Union harmonisation
legislation for industrial products. Nevertheless, the SME Test[20] should always be
applied to ensure that administrative requirements do not impose
disproportionate burdens on SMEs while ensuring that the legislation achieves
its objectives.

(17) 
 A single reference source on changes made to
Union harmonisation legislation for industrial products and updates to
standards and when these come into force should be available for firms. Such information
would save time and resources for industry, particularly SMEs. Businesses
signing up to the service could then receive email updates outlining upcoming
changes and informing them when these will take place. Moving from a
legislative-based to a product-based approach to informing economic operators
about applicable Union harmonisation legislation for industrial products and
voluntary standards would however be a technically demanding and
resource-intensive exercise. It would also require strong cooperation and
support of industry associations and European standardisation organisations,
some of which already do relevant work in this area.

(18) 
 Business should be allowed to continue to choose
between producing a single declaration of conformity and a different
declaration of conformity for each piece of applicable Union harmonisation
legislation for products.

(19) 
It is crucial that industry is not
over-burdened with too frequent legislative changes,
since there have been many changes in the past decade, with others due to come
into effect in the near future. Regulatory action/measures should continue to be
subject to public consultation and supported by impact assessments.

4.5.        Extending the reach of
Union harmonisation legislation on products

(20) 
The Commission should promote international
convergence in legislation and technical standards
for industrial products, since this could help to lower compliance costs for
industry, thereby strengthening industrial competitiveness. The Trade and
Investment Partnership (TTIP) being negotiated between the EU and the US is an
important step in the right direction and further cooperation with regulators
and standards bodies in other third countries that are key European export
markets should be explored, especially in countries which often base standards
either on European or international ISO and IEC standards.

5.           A vision for the future

The importance
of addressing regulatory barriers will only increase with the pace of
technological change and as the world, and global supply chains, become ever
more integrated. Against this background and bearing in mind the overriding
need to minimise administrative burdens, especially for SMEs, the following
areas appear to be those where attention should be focused.

5.1.        A well-functioning
internal market for products needs strong enforcement mechanisms

Beefing up
market surveillance and ensuring that Member States invest the necessary human
and financial resources in market surveillance is key for strengthening
enforcement mechanisms. The challenge is twofold. On the one hand, authorities
must ensure legislation is enforced as a tool to safeguard important public
interests such as health and safety, the protection of the environment and
security, and the protection of consumers. On the other hand, enforcement
mechanisms help eliminate unfair competition and create a level playing field
for economic operators. Coordination and cooperation between enforcement
authorities in the internal market are also essential.

Almost all
business organisations welcomed the Commission’s new ‘Market Surveillance
Package’ but regretted that sanctions for non-compliance with harmonised rules
were not applied coherently. These sanctions are not, as such, part of market
surveillance but are rather a consequence of it. Some stakeholders argue that a
disaggregated, scattered system of economic sanctions results in non-compliance
with EU law always shifting to the area where the sanctions are most lenient at
a given time. This situation might be prevented if the economic penalties of
the different Member States were streamlined or harmonised at least in a way
that avoids large discrepancies and treats all of infringements of product
legislation in a similar way throughout the EU.

Therefore,
the Commission will consider elaborating a legislative proposal on how to
streamline and harmonise economic sanctions of an administrative or civil
nature for non-compliance with Union harmonisation legislation to ensure equal
treatment of all businesses throughout the internal market for industrial
products. A Platform of enforcement authorities facilitating their work and
mutual cooperation will be of added value.

5.2.        ‘Horizontal’ legislation
on products

Many
stakeholders pleaded for less sector rules and more horizontal rules across
industrial product sectors to avoid overlapping or conflicting requirements. A
legally-binding horizontal “umbrella” legislation setting out common elements
across sectors was advocated by many stakeholders. However, there were also
differing views on this point, with some stakeholders preferring all the relevant
text to be included in each Directive. Several competent authorities, market
surveillance authorities and industry associations were in favour of
transforming Decision 768/2008/EC into a Regulation since such a horizontal
Regulation would reduce the volume of the current legislation, which is often
considered to be duplicative and not SME-friendly. Unlike Decision 768/2008/EC
which only contains reference provisions, the horizontal “umbrella” regulation
would also be legally binding and directly applicable.

An example at
national level exists in the horizontal national regulation adopted in Germany based on Decision 768/2008/EC. This provides a regulatory umbrella and overall
framework under which sectoral legislation at national level stemming from European
product legislation is structured.

The
proposal on how to streamline and harmonise economic sanctions of an
administrative or civil nature for non-compliance with Union harmonisation
legislation should also take a new step in streamlining and making simpler the
existing common legal framework for the marketing of industrial products,
including their maintenance and after-sales.

5.3.        Innovation and the digital
future

The digital
society evolves at an increasing pace. For example, future robotics and new
manufacturing technologies such as additive manufacturing, also known as “3-D
printing” could bring a significant amount of today’s production back to a
local, and perhaps more sustainable dimension. 3-D printing has the potential
to level the playing field between SMEs and large industry in reducing
development costs and in allowing firms to develop prototypes and initial
designs in-house rather than having to outsource them, which may be at a
prohibitive cost. At the same time, the mobile revolution is set to continue,
branching into a whole class of new smart, wearable devices such as smart
watches or glasses, smart textiles etc.

In short, the
world is rapidly moving towards the 'internet of things' in which all objects
will be equipped with minuscule identifying devices. If all objects in daily
life were equipped with radio tags, they could be identified and inventoried by
computers. Software will handle everything needed to allow products to be
tracked and counted, and waste, loss and cost to be greatly reduced. It will
inform users when things need replacing, repairing or recalling, and whether
they are fresh or past their best.

However, when
most of the Union harmonisation legislation was adopted, there were hardly any
electronic tools available. Compliance with the rules still involves paperwork
for businesses and market surveillance authorities.

In order to
remain competitive, the European market for industrial products needs a
regulatory framework that facilitates innovation and does not create unnecessary
barriers for the timely take-up of new technologies and market introduction of
innovations. EU legislation and standards need to allow
new products and technologies to be made available on the market rapidly so
that Europe can avail itself of a first mover advantage in the global
marketplace. At the same time, novel challenges brought about by new
technologies will also increasingly have to be taken into account, such as the
risk of unregulated production of dangerous goods by 3-D printers or the impact
of potentially concealed audio-visual recording equipment in smart devices
becoming more and more pervasive.

The
Commission will take into account innovation and technological developments in
the elaboration of any new proposals in the internal market for products
sphere. It will also launch an initiative on e-Compliance whereby compliance
with Union harmonisation legislation can be demonstrated electronically and in
several languages, for example through e-labelling, digital market surveillance
and electronic declarations of conformity in all official Union languages.

5.4.        The blurring distinction
between products and their connected services (installation, maintenance, etc.)

Manufacturing
firms are increasingly offering services along with their traditional products.
The interaction between manufacturing and services has become more complex.
Services and manufactured products are used as intermediary inputs to produce a
larger number of final products and services. The service content of manufacturing
has been growing in the EU and elsewhere in the world. In 2011, more than a
third of value added embodied in manufacturing final output was accounted for
by services.

Although
manufacturing products are also used for producing services, the manufacturing
content of services is about three times smaller than the service content of
manufacturing and has increased much less over time. The average manufacturing
content of services produced in the EU is around 10%.

There is a high
degree of complementarity between manufacturing products and services[21]. Services such as maintenance and training are very important
elements in the delivery of complex manufactured products. Other services such
as transport are essential to the completion of manufactured products, but are
still subject to certain market restrictions. At the same time the importance
of specialised services such as financial intermediation, communications,
insurance and specialised knowledge-intensive business services (KIBS) are
becoming important inputs in the production of sophisticated manufacturing
output. This process is one of several explanations for the increasing
contribution of services to the overall output of an economy[22].

The issue
of complementarity of products and services has an increasing importance for
the economy. The Commission will examine how to improve the interface between
manufacturing products and services within the internal market.

5.5.        More Regulations, less Directives...

Directives have
been the preferred instruments for harmonisation of product legislation and
have made the internal market for industrial products a reality. Today however
considering the high level of market integration, the challenges are new and
the policy objectives even more ambitious.

In an
increasingly complex world access to information on rules for products is very
important. The costs associated with finding the right information can be
considerable. This is true not least for cross-border trade. Access to
information can still be a problem in the single market for products in which
Directives are binding on the result to be achieved, but leave to Member States
the choice of form and methods. As a result of this flexibility, the
transposition of EU provisions and their implementation may vary from one
country to another and endanger the coherence of the overall regulatory
framework for products. The risk is particularly high where concepts are vague
or provisions imprecise, as often results from conciliating the interests of 28
or more countries. As a matter of fact, lack of information or regulatory
differences can constitute a very significant trade barrier within the EU, and
this is, of course, mostly the case for SMEs. It does not become easier if
businesses need to communicate with a large number of government authorities in
several different languages.

Switching
from Directives to Regulations leads to less red tape and more certainty for
businesses. Subject to a case-by-case assessment, the Commission will
henceforth give priority to the form of a Regulation as the main source of
Union law for businesses and authorities so that there would be no gold plating
and the number of infringement cases would be reduced to a minimum.

5.6.        ...and a business friendly
approach to product rules

More should be
done to help businesses comply with EU law on industrial products. It is
essential to keep the right balance between the costs of regulation and the
objectives it pursues. At the moment, businesses are confronted with multiple
legislative acts applying to the same products/manufacturers and the boundaries
between many of these acts are sometimes unclear. The internal market law is
spread over hundreds of Directives that might have different scopes,
procedures, approaches, etc. and require additional transposition measures.

Therefore,
simplification and clarification of the product rules is at the heart of
Commission’s priorities. A deeper regulatory integration of the internal market
for products is needed. Ideally, the regulatory approach whereby products are
subject to several Directives pursuing similar or different public interests
and transposed differently in the Member States, could be reduced by creating
legislative “one stop shops” for manufacturers of a given category of products.
Such an approach would mean that several requirements applicable to one product
group could be covered by a single and coherent legislative approach. Major
regulatory simplifications should be a medium- to long-term objective. They
should be subject to thorough impact assessments and synchronised with the
periodic reviews of legislation. The Commission thus acknowledges the
cumulative effects of the frequency of changes to European legislation, as well
as the express request of industry for periods of regulatory stability with
incremental change, rather than frequent major overhaul of the harmonised
legislation on products.

Besides business
friendly rules, it is also important that standards do not create market
fragmentation. Given the limited possibility for the Commission to intervene in
the standardisation process, Member State authorities are encouraged to be
actively involved in the standards development in order to avoid instances
where standards are only challenged at the end of the process.

When a
periodic review of sectoral legislation is carried out, the Commission will
consider whether it is feasible to regroup it with other legislation applicable
to the same category of products.

5.7.        The global market

The importance
of addressing regulatory barriers will only increase as the world becomes more
multipolar and as new centres for economic development and trade, with their
regulatory environment, emerge in fast-growing developing countries.

Previously, the
EU could rest assured of the attractiveness of its regulatory model, since
complying with EU regulation meant that trading partners gained access to the
world’s largest importer of goods. By virtue of the size of the internal market
the EU was a “standard setter” in the international arena. However, to remain
competitive and ensure that EU companies have the best opportunities, the EU
needs to recognise that this situation is changing and to adapt to the new
reality. The international competitiveness of EU business needs to play a
stronger role in the evaluation of existing EU regulation and the consideration
of options for new initiatives.

The EU’s
approach towards its trading partners varies. On the one hand, the goal
vis-à-vis countries aspiring accession to the EU and other neighbouring
partners is to achieve full alignment to the EU regulatory model. On the other
hand, although the approach towards more distant partners cannot be as
ambitious, it is still targeted at regulatory convergence. From the point of
view of economic operators, regulatory convergence presents major advantages
compared to mutual recognition agreements, in particular in terms of legal
certainty.

In an
increasingly low-tariff global environment, regulatory or “behind the border”
barriers are responsible for relatively higher administrative and substantive
compliance costs for industry. The EU should upgrade its strategic dialogues
with key third countries as a means of building mutual trust and improving the
predictability of regulatory developments. This is an essential tool for
industry to plan ahead.

The EU is
already negotiating free trade agreements with important industrialised
countries. These negotiations open up opportunities to reduce regulatory
obstacles between key trading partners while ensuring a high level of
protection of public interests. They contribute to a broader reflection about
common, global rules on products. For the EU this means greater access to key
emerging markets where there is high economic growth and demand.

A transatlantic
trade agreement that eliminates traditional trade barriers to products and
services would be a major step towards such global rules. It could reduce
regulatory compliance costs for companies across the economy. Adopting common
transatlantic regulations for new technologies could save millions and help
define open global standards and regulations for the industries of the future.

The EU
should continue to promote international convergence in legislation and
technical standards for industrial products while ensuring a high level of
protection of public interests. The Commission should ensure a stronger focus
on the impact of EU regulation on the international competitiveness of EU
business.

6.           Conclusion

Despite its
stage of development and advanced integration, the internal market for products
needs to continue evolving in order to keep up with the pace of technological
and societal challenges of the 21 century. However, this needs to be balanced
with the request of industrial stakeholders for periods of regulatory stability
without major overhaul of the rules. Therefore, in the short term, the
Commission will focus its efforts on the consolidation of legislation and the
strengthening of enforcement mechanisms without furthering burdening the
industry. The Commission will work on a proposal consisting of a harmonised
approach to economic sanctions and a common framework for the marketing of
industrial products based on Decision 768/2008/EC.

[1]               COM (2012) 582 final “A Stronger European Industry
for Growth and Economic Recovery - Industrial Policy Communication Update”.

[2]               Directive 98/34/EC sets up a procedure which imposes
an obligation upon Member States to notify to the Commission and to each other
all the draft technical regulations concerning products and soon Information
Society Services before they are adopted in national law.

[3]               The notion of 'industrial products' should not be
seen in opposition to 'consumer products'. Whereas the former definition is
based on the production process, the latter is based on the end-use. Many
industrial products are therefore also consumer products, although not all
(some are for professional use only).

[4]               An indicative list of Union harmonisation acts is
available at: http://ec.europa.eu/enterprise/policies/single-market-goods/documents/internal-market-for-products/new-legislative-framework/index_en.htm#h2-2

[5]               OJ L 157/24 of 9.6.2006.

[6]               COM(2013) 561 final.

[7]               Directive 2013/29/EU on pyrotechnic articles has been
already adopted and the legislator has also reached an agreement on the
Recreational crafts directive. The proposals on radio equipment,
electromagnetic compatibility, low voltage products, lifts, equipment used in
explosive atmospheres (ATEX), civil explosives, measuring instruments,
non-automatic measuring instruments, simple pressure vessels, pressure
equipment, personal protective equipment, cableways, and gas appliances are
still pending.

[8]               OJ L 88/5 of 4.4.2011.

[9]               OJ L 316/12 of 14.11.2012.

[10]             Regulation (EC) No 764/2008 of the European Parliament
and of the Council of 9 July 2008 laying down procedures relating to the
application of certain national technical rules to products lawfully marketed
in another Member State and repealing Decision No 3052/95/EC.

[11]             Council Conclusions on Single Market Policy (16443/13).

[12]             COM(2012) 584 final.

[13]             http://ec.europa.eu/enterprise/policies/single-market-goods/documents/internal-market-for-products/new-legislative-framework/index_en.htm#h2-3

[14]             Rapid Alert System for non-food
dangerous products. More information on RAPEX is available at: http://ec.europa.eu/consumers/safety/rapex/index_en.htm

[15]             Information and Communication
System on Market Surveillance. More information on ICSMS is available at: http://ec.europa.eu/enterprise/policies/single-market-goods/internal-market-for-products/icsms/index_en.htm

[16]             http://ec.europa.eu/enterprise/policies/single-market-goods/internal-market-for-products/market-surveillance/index_en.htm#h2-1

[17]             L 218/30 of 13.8.2008.

[18]             Find out more about the Internal Market Information
System here: http://ec.europa.eu/imi-net

[19]          OJ L
218/21 of 13.8.2008.

[20]             An analysis of the effects of a legislative proposal on
SMEs. More information is available at: http://ec.europa.eu/enterprise/policies/sme/small-business-act/sme-test/

[21]             The High Level group on Business Services proposed in
the Commission Communication "Towards a Single Market Act" (COM
(2010) 608) discusses the complementarity between products and services. Their
final report is expected in Spring 2014.

[22]             European Competitiveness Report 2013.