No C 221/32 Official Journal of the European Communities 28. 8. 89 
Opinion on 1992 and the Community's external trade: the impact of a single Community 
internal market on the Community's trade with its major trading partners 
(89/C 221/07) 
On 25 October 1988, the Economic and Social Committee decided, under the fourth paragraph 
of article 20 of its rules of procedure, to issue an Opinion and Report on 1992 and the 
Community's external trade. 
The Section for External Relations, Trade and Development Policy, which was responsible 
for preparing the Committee's work on the subject, adopted its Opinion and Report on 
16 June 1989. The rapporteur was Mr Beltrami. 
At its 268th plenary session (meeting of 12 July 1989) the Economic and Social Committee 
adopted the following Opinion nem. con., with 2 abstentions. 
1. General comments 
1.1. Thirty years after its foundation, the Com­
munity plays a major role in international affairs, as 
the figures in the appended Report show. 
In terms of economic policy it has managed to pursue 
an independent line with regard not only to trade but 
also to monetary and financial matters. 
On the trade front, the Community has achieved signifi­
cant and innovative results in its relations with 
countries in all five continents; this has enhanced its 
negotiating position and the international standing of 
its institutions. 
The creation and strengthening of the European Monet­
ary System and the broad balance achieved in visible 
trade with non-EEC countries have also helped to con­
solidate multilateral trade and increase the prosperity 
of the Community and its trading partners. 
As the world's leading trading power, the Community 
has given a fresh momentum to cooperation with devel­
oping countries. 
1.2. This has been accomplished partly by adhering 
to the principles enshrined in the Treaty of Rome, and 
partly in response to guidelines which have gradually 
evolved in the Community institutions. 
1.3. Nevertheless, the Community's negotiating 
capacity is undermined by the procedures for establish­
ing negotiating briefs, which limit the Commission's 
room for manoeuvre. The Community therefore needs 
broader legal and administrative powers in this area. 
This will enable it to adapt swiftly to international 
developments, pursue long-term strategies and establish the relative priority of aims for its common policy (l) 
on economic relations with third countries (2). 
The completion of the internal market and a genuine 
common trade policy will require Community-level 
management of all trade policy instruments and prefer­
ential arrangements (including quotas and tariffs) as 
well as relinquishment of national claims to regulate 
individual aspects of trade relations with third countries 
independently. The Commission and the Council are 
therefore urged to push ahead with the adoption of 
measures to establish and strengthen the Community's 
identity abroad (!). 
As the world's main trading market, the Community 
must adopt a liberal, open approach in order to enhance 
its own, as well as worldwide, socio-economic equilib­
rium. 
The ongoing integration of the internal Community 
market must be coupled with a trade policy conducive 
to the increasing liberalization of world markets. It is 
inappropriate to speak of a 'Fortress Europe'. Europe 
takes the lead in world trade, and will continue to do 
so. The Committee unequivocally supports the view 
that Europe is a 'partner' and force for progress. 
Once again the Committee would stress that in all its 
external relations the Community should promote not 
only international economic progress but also social 
progress and respect for human rights and fair labour 
(') Study on the EKC's external relations—stocktaking and con­
sistency of action (rapporteur: Mr Romoli) (CES 28 January 
1982). 
(') Information report on the position of the GATT negotiations 
after the Montreal mid-term review (rapporteur: Mr Romoli) 
(CKS 16 March 1989). 
28. 8. 89 Official Journal of the European Communities No C 221/33 
standards as defined by the International Labour Office 
(ILO) (*). This should not be seen as political inter­
ference in the internal affairs of other countries. 
2. Issues relating to the Community's international 
trade 
2.1. Sectors governed by multilateral relations 
2.1.1. The Committee agrees on the importance of 
the General Agreement on Tariffs and Trade (GATT) 
talks as regards multilateralism and non-discrimination. 
It would therefore ask the Commission, as the body 
negotiating on behalf of the Member States, to 
respect—and insist that its trading partners do like­
wise—the commitments set out in the Punta del Este 
Declaration (2). 
2.1.2. The multinational negotiations have a major 
bearing on the external impact of the single-market 
programme, and their final outcome is extremely 
important, as the ESC Report made clear (3). 
2.1.3. The Commission, with the Community's 
economic weight behind it, should use existing machin­
ery (antidumping, distorsion of trade and unfair trade 
policies) decisively and effectively. As the Committee 
has noted before (4), the Commission must also increase 
the number of administrative staff dealing with deter-
(') ESC opinion on the proposal for a Council Regulation (EEC) 
applying generalized tariff preferences for 1988 in respect of 
certain industrial products originating in developing 
countries; proposal for a Council Regulation (EEC) applying 
generalized tariff preferences for 1988 to textile products 
originating in developing countries; proposal for a Council 
Regulation (EEC) applying generalized tariff preferences for 
1988 in respect of certain agricultural products originating in 
developing countries; draft Decision of the representatives of 
the Governments of the Member States of the European Coal 
and Steel Community, meeting with the Council applying 
for 1988 the generalized tariff preferences for certain steel 
products originating in developing countries (rapporteur: 
Mr Cavazzuti) (OJ No C 319, 30. 11. 1987). 
(2) ESC opinion on the GATT/Uruguay Round negotiations: the 
current situation and future prospects from the viewpoint of 
relations between the European Community and the main 
industrialized countries, the developing countries, and 
the State-trading countries (rapporteur: Mr Romoli) (OJ 
No C 318, 12. 12. 1988). 
(•') Information report on the position of the GATT negotiations 
after the Montreal mid-term review (rapporteur: Mr Romoli) 
(CES 16 March 1989). 
(4) ESC Opinion on relations between the European Community 
and the newly industrializing countries of South-East Asia 
(rapporteur: Mr Collas) (31 March 1989) (OJ No C 139, 
5.6. 1989). rent measures and strengthen the 'new Community 
commercial instrument' if it is to tackle unfair compe­
tition effectively. At all events, a firm position is needed 
on the fourteen topics which are the subject of multilat­
eral negotiations aiming, inter alia, to strengthen the 
(weak) machinery for settling disputes (2). 
2.1.4. GATT's international status and role as an 
arbitrator should be strengthened by bringing all visible 
trade within its sphere of influence and negotiating the 
gradual elimination of present exceptions (3) (5) (6). 
2.1.5. In a highly significant judgment rescinding 
two Community Regulations of December 1986 (7), the 
Court of Justice has stressed the importance of conduct­
ing transactions with other regions within the frame­
work of a common trade policy. In the light of this the 
Commission is asked to negotiate the gradual opening 
of the internal market in the goods in question to 
countries which are prepared to open up their home 
markets in return, to the extent that their level of 
development and economic resources allow. 
2.1.6. The Commission is asked to call at inter­
national level for a more accurate definition of the 
developing countries, and to rank them according to 
per capita income. Countries with a per capita income 
above that of a Member State should be asked to 
observe more closely the principles underpinning 
GATT. The question of ranking should therefore be 
given priority in the forthcoming Uruguay Round. It 
goes without saying that these countries may be 
excluded from the generalised system of preferences 
(GSP) so that other countries can benefit more. Non-
GATT members, particularly the newly industrializing 
(5) ESC opinion on relations between the European Community, 
Japan and the USA (rapporteurs: Mr Curlis and Mr Staratzke) 
(OJ No C 328, 22. 12. 1986). 
(6) ESC opinion on the impact of current US economic and 
political developments on the Uruguay Round and inter­
national trade (rapporteur: Mr Romoli) (OJ No C 232, 
31. 8. 1987). 
(7) Council Regulation (EEC) No 3924/86 applying generalized 
tariff preferences for 1987 to certain industrial products orig­
inating in developing countries and Council Regulation 
No 3925/86 applying generalized tariff preferences for 1987 
to textile products originating in developing countries (OJ 
No L 373, 31. 12. 1986, p. 1 and 68). 
No C 221/34 Official Journal of the European Communities 28. 8. 89 
nations, should be asked to make a firmer commitment 
to the principles of a multilateral trading system and 
to joint GATT(1)(2)(3)(4). 
2.1.7. The GSP should not apply to counterfeit prod­
ucts, and there should be a reappraisal of the position of 
countries which, having progressed to a more advanced 
stage of industrialization, introduce export quotas for 
raw materials and thereby create unfair market distor­
tions, to the benefit of their own national indus­
tries^) (5). 
2.1.8. The Commission should continue to hold 
multilateral talks on subjects which fall within the 'grey 
area', and help to open up national markets which are 
not at present governed by the new rules on inter­
national competition. 
2.1.9. Where subjects are not yet covered by multilat­
eral talks, the Commission is asked to propose their 
inclusion. 
2.1.10. The completion of the internal market will 
automatically require closer links between the European 
Community and the Organization for Economic Co­
operation and Development (OECD). We cannot con­
tinue with the present situation, in which Member 
States are able to make commitments on matters which 
are the responsibility of the Community. A change in 
the role of the Community within the OECD will mean 
that the Community institutions will have to take a 
more active part in working parties. 
2.1.11. The completion of the internal market should 
not affect rights granted under international agreements 
negotiated by the EEC either multilaterally (GATT, 
OECD) or bilaterally [agreements with the European 
(!) Information report on the position of the GATT negotiations 
after the Montreal mid-term review (rapporteur: Mr Romoli) 
(CES 16 March 1989). 
(2) ESC Opinion on relations between the European Community 
and the newly industrializing countries of South-East Asia 
(rapporteur: Mr Collas) (31 March 1989) (OJ No C 139, 
5. 6. 1989). 
(3) Report of the section for External Relations on the renewal 
of the generalized system of tariff preferences of the European 
Community for the five-year period 1986 to 1990 (rapporteur: 
Mr Cavazzuti — 16 September 1985). 
(4) ESC opinion on the proposal for a Council Regulation (EEC) 
applying generalized tariff preferences for 1989 (rapporteur: 
Mr Cavazzuti) (OJ No C 318, 12. 12. 1988). 
(5) ESC opinion on the GATT/Uruguay Round negotiations: the 
current situation and future prospects from the viewpoint of 
relations between the European Community and the main 
industrialized countries, the developing countries, and 
the State-trading countries (rapporteur: Mr Romoli) (OJ 
No C 318, 12. 12. 1988). Free Trade Association (EFT A), Mediterranean 
countries, African, Caribbean and Pacific States (ACP) 
or countries of the Association of South-East Asian 
Nations (ASEAN)]. The Community is obliged to hon­
our these agreements, provided of course that the beni-
ficiary countries do likewise. The same applies to stan­
dards and public supply contracts in sectors covered by 
GATT codes: the benefits of the single market will 
be extended without discrimination to all the trading 
partners. 
2.2. Sectors governed by bilateral national relations 
2.2.1. There are two areas here in which a Com­
munity policy can be developed. 
2.2.2. The first concerns the Community's policy on 
visible trade, which contains a number of gaps owing to 
differences in the Member States' import arrangements. 
2.2.3. The most important of these are: the remain­
ing quotas still imposed by individual Member States 
on third countries; textile quotas fixed by some Member 
States on the basis of bilateral agreements between the 
Community and non-EEC countries; and quotas on 
sensitive products laid down for Member States under 
GSP agreements between the Community and develop­
ing countries. 
2.2.4. Differing import arrangements and the attend­
ant fragmentation of the Community market result in 
serious disparities in access to the Community market; 
they require controls at internal Community frontiers, 
which is contrary to the objective of creating a single, 
large internal market by 1992. The completion of the 
internal market should above all serve to iron out any 
remaining disparities resulting from national quotas on 
goods imported from outside the Community. To this 
end, the safeguard measures provided for in Article 115 
will in principle have to be scrapped and rules on 
imports from outside the Community will have be 
aligned (4) (6). Once Community import policy has been 
(6) ESC opinion on the proposal for a Council Regulation (EEC) 
applying generalized tariff preferences for 1988 in respect of 
certain industrial products originating in developing 
countries; proposal for a Council Regulation (EEC) applying 
generalized tariff preferences for 1988 to textile products 
originating in developing countries; proposal for a Council 
Regulation (EEC) applying generalized tariff preferences for 
1988 in respect of certain agricultural products originating in 
developing countries; draft Decision of the representatives of 
the Governments of the Member States of the European Coal 
and Steel Community, meeting with the Council applying 
for 1988 the generalized tariff preferences for certain steel 
products originating in developing countries (rapporteur: 
Mr Cavazzuti) (OJ No C 319, 30. 11. 1987). 
28. 8. 89 Official Journal of the European Communities No C 221/35 
harmonized, the Community will also have to coordi­
nate the criteria governing the 'local content' of Com­
munity products, bearing in mind its stance on the 
establishment and holdings of non-EC companies in 
individual Member States. It should be possible to 
accomplish this without serious problems in many sec­
tors at present protected by quotas. 
2.2.5. In some sectors, however, a fully liberalized 
external trade policy could have adverse social and 
economic implications. In such instances, the Com­
munity should introduce adequate support measures, 
such as greater use of the structural funds for industrial 
redevelopment, with due respect for the principle of 
cohesion. 
2.2.6. However, it is always possible that national 
safeguard measures for certain products will be trans­
formed into Community ones at the end of 1992. Safe­
guard measures of this kind should comply with inter­
national rules which have been agreed on by the trading 
partners. 
2.2.7. The Committee would recommend the grad­
ual application of protection and safeguard measures 
at Community level. At first the Community should 
maintain the current level of protection, but afterwards 
gradually reduce it(1) in tandem with the elimination 
of practices of its trading partners which go against the 
letter and spirit of GATT. 
2.2.8. The establishment of a time limit will be a 
clear and unequivocal indication of the Community's 
political will and of the temporary nature of such 
protectionist measures. 
2.2.9. The Committee stresses the immediate need: 
to strengthen the productivity and competitiveness of 
sectors which will lose the protection they enjoy at 
present; to build up the technological resources of Com­
munity firms with the aid of common research pro­
grammes and appropriate training of employees; to 
adopt suitable instruments to protect industrial and 
intellectual property and know-how in advanced sectors 
(industrial standards) (2). 
(*) ESC opinion on the proposal for a Council Regulation (EEC) 
applying generalized tariff preferences for 1989 (rapporteur: 
Mr Cavazzuti) (OJ No C 318, 12. 12. 1988). 
(2) ESC opinion on relations between the European Community 
and the newly industrializing countries of South-East Asia 
(rapporteur: Mr Collas) (31 March 1989) (OJ No C 139, 
5. 6. 1989). 2.3. Sectors not covered by international agreements 
2.3.1. A second area of uncertainty concerns sectors 
which are not covered by international agreements 
(such as trade in services) or by the new regulations on 
public supply contracts (telecommunications, water, 
energy, transport). For all these sectors, the Community 
is framing its own proposals in the run-up to the inter­
nal market. 
2.3.2. In such cases, if there is no automatic exten­
sion, reciprocity can be negotiated multilaterally or 
bilaterally with non-Community countries. The Com­
mittee has advocated an open, multilateral and non­
discriminatory approach to any such negotiations in 
the spirit of GATT(3), provided beneficiary countries 
do likewise. 
2.3.3. Given the increasing strategic importance of 
financial and insurance services in the Community and 
world economies, the opening up of these markets 
should be negotiated so that the treatment offered by 
Community countries is extended to the territory of 
non-EEC countries. 
2.3.4. The basic principle which should apply to all 
financial services is that a Community-based financial 
body should have the same access as national operators 
to the financial markets of non-Community countries. 
2.3.5. In sectors subject to EC harmonization, the 
Commission should verify that Community companies 
obtain equal treatment and access. The Committee fully 
supports the principle of a balance of mutual advantage, 
as proposed by the Commission. 
2.3.6. The Committee feels that the best way of 
demonstrating the success of the single Community 
market and its stimulating effect on world economic 
growth would be for the ECU to be recognized as the 
European currency and as the currency for conducting 
trade in goods and services. This will strengthen econ­
omic and financial cohesion in the Community and 
bring an element of certainty and stability to an inter-
(3) ESC opinion on relations between the European Community, 
Japan and the USA (rapporteurs: Mr Curlis and Mr Staratzke) 
(OJ No C 328, 22. 12. 1986). 
No C 221/36 Official Journal of the European Communities 28. 8. 89 
national monetary system which is far too volatile and 
easily influenced by fluctuations in the dollar (^ (2). 
2.3.7. The Committee feels that it would be advan­
tageous for non-EC countries to be able to link their 
financial and commercial transactions to the European 
monetary area. These transactions could be conducted 
in ECU. 
3. The external impact of 1992 
3.1. As the accompanying Report makes clear, the 
completion of the many aspects of the internal market, 
by means of the related accompanying measures set out 
in the White Paper, will enable Community firms to 
realize their full potential. In addition to stimulating 
internal trade, this will enhance their competitiveness 
in markets outside the Community. 
3.2. They will need the support of an active Com­
munity external policy designed to ensure that third 
countries understand and value Europe's increasing 
attractiveness as a trading partner and as a market. The 
Commission should also contribute in every negotiating 
body to (a) the removal of obstacles barring the access 
of Community firms to outside markets, and (b) the 
completion of trade and cooperation agreements to 
create lasting economic ties and strengthen the Com­
munity's leading role in international economic 
relations. 
3.3. Exporters to the Community will benefit from 
a single market of 320 million consumers, with uniform 
standards and procedures, where goods can move free­
ly. The completion of the internal market and the 
attendant liberalization will undoubtedly have the 
additional advantage of attracting outside investment, 
thereby creating new jobs. 
3.4. A differentiated approach to the main economic 
areas is needed, according to their individual character­
istics. These include developing countries, state-trading 
(') ESC opinion on the GATT/Uruguay Round negotiations: the 
current situation and future prospects from the viewpoint of 
relations between the European Community and the main 
industrialized countries, the developing countries, and 
the State-trading countries (rapporteur: Mr Romoli) (OJ 
No C 318, 12. 12. 1988). 
(2) ESC opinion on the impact of current US economic and 
political developments on the Uruguay Round and inter­
national trade (rapporteur: Mr Romoli) (OJ No C 2.32, 
31. 8. 1987). countries (Comecon), countries with which the Com­
munity has free trade arrangements (e.g. EFTA) and 
other special areas, such as the Mediterranean and the 
Gulf. The Committee feels that in future relations will 
have to be conducted within a multilateral framework. 
The Committee attaches particular importance to the 
following points: 
3.4.1. It fully supports the Commission's policy 
towards the EFTA countries, ensuring that they actively 
participate in opening up a large free trade area with 
the Community, again in accordance with multilateral 
rules. For the reasons outlined in the appended Report, 
the EFTA nations—which together already form the 
Community's main trading partner—are likely to be 
the main beneficiaries of the Community's internal 
market. 
3.4.2. It is in favour of constructive action in respect 
of Mediterranean, Gulf, ASEAN and Latin American 
countries. Consolidation of trade links with these 
countries and support for their economic development 
should be based on broader economic, technological, 
financial, agricultural and industrial cooperation. Clos­
er economic integration among groups of countries 
should be encouraged. Relations with the Mediterrane­
an countries deserve particular attention, reaffirming a 
continued commitment to the goals which have under­
pinned Community policy. The cooperation agreements 
mentioned above should be extended to encourage 
Community firms to take part in more joint projects 
with local partners and to pool resources in a joint 
drive for growth. The Commission is also asked to 
review its policy on cooperation with Pacific countries, 
inter alia in the light of the economic momentum that 
has gathered strength in individual countries over the 
past decade (3). 
3.4.3. Trade relations with Comecon countries can 
be developed on the basis of the joint Declaration 
recognizing the EEC as a legal, institutional and econ­
omic entity. However, in the light of the special political 
and economic situation in the Comecon area, it will 
only be possible to achieve significant results in the 
medium term by gradually phasing out most of the 
remaining quotas and, above all, by promoting broader 
(') ESC opinion on relations between the European Community 
and the newly industrializing countries of South-East Asia 
(rapporteur: Mr Collas) (31 March 1989) (OJ No C 139, 
5. 6. 1989). 
28. 8. 89 Official Journal of the European Communities No C 221/37 
economic, financial and industrial cooperation in 
accordance with market laws (1). The Committee never­
theless believes that trade relations between the Com­
munity and the European members of Comecon should 
be improved and extended, particularly at this time of 
change in the countries concerned and developments in 
international economic relations, primarily by offering 
these countries real help in getting to grips with the 
problems confronting them (2). 
3.4.4. ACP countries need assurances of continuing 
cooperation in all forms—financial, commercial, tech­
nical and institutional—and a continuing policy of non­
interference and non-discrimination on the part of the 
Community. Community measures are however needed 
to enhance the role of local economic and social interest 
groups, open up opportunities for private investment 
and encourage smaller firms, cooperatives and non­
governmental organizations to play a more active 
part(3). 
3.4.5. It is imperative that cooperation programmes 
with ACP and Latin American countries include appro­
priate solutions to the serious problem of indebtedness. 
As well as helping to stabilize exchange rate parities, a 
coordinated approach by the EEC and the other major 
economic partners, in conjunction with the World Bank 
and the International Monetary Fund, will encourage 
policies aimed at developing ACP/Latin American 
countries and promoting their exports (n). This will 
help to reverse the trend towards recession, which 
otherwise risks jeopardizing their political stability and 
their legitimate aspirations to development. The Com­
mittee urges the Council to present effective proposals 
and to strengthen its financial cooperation instruments 
in order to support economic adjustment in ACP and 
Latin American countries. 
3.4.6. The Committee would point out that the ben­
efits of the internal market could be undermined if the 
United States were to react negatively, as this could 
lead to a freeze in EC-US relations. 
(') ESC opinion on the GATT/Uruguay Round negotiations: the 
current situation and future prospects from the viewpoint of 
relations between the European Community and the main 
industrialized countries, the developing countries, and 
the State-trading countries (rapporteur: Mr Romoli) (OJ 
No C 318, 12. 12. 1988). 
(2) ESC opinion on relations between the European Community 
and European state-trading countries (rapporteur: Mr Brigan-
ti) (28 April 1988) (OJ No C 175, 4. 7. 1988, p. 39). 
(•') ESC opinion on the IVth EC/ACP Convention (rapporteur: 
Mr Delhomenie) (3 June 1988) (OJ No C 208, 8. 8. 1988). The difficulties encountered by the United States in 
resolving domestic problems caused by high public 
spending and trade deficits, with a consequent decline 
in the competitiveness of its manufacturing and agricul­
tural sector, have prompted it to introduce measures 
which in practice create unnecessary distortions in the 
growth of international trade (1988 Trade Act, fluctu­
ations in the dollar, etc.). 
The Community and the United States must settle their 
outstanding problems, particularly those of agriculture, 
in the course of the Uruguay Round if the future of the 
multilateral trade system is to be assured. 
The Committee endorses the firm line recently taken 
by the Commission in defending the Community's legit­
imate interests and would urge it to continue in this 
vein, though it should also continue its dialogue with 
the US in order to clear the air and resolve the present 
dispute, so that the two partners can cooperate closely 
in the spirit of multilateralism enshrined in GATT. 
The Commission should continue to play a part in 
strengthening the GATT machinery so that it can 
acquire greater international credibility. 
3.4.7. The Community's objective in its relations 
with Japan should be a more balanced pattern of trade. 
This could be achieved if the Japanese market was 
decisively opened, allowing greater penetration by 
Community firms. This would help reduce current trade 
conflicts which could result in protectionist meas­
ures (^ (4) (5). 
3.4.8. The Committee believes that more balanced 
international economic growth will result from the vast 
potential of the internal market and fair cooperation 
between the EEC, the US and Japan, and from a settle­
ment on the problem of the external debt of developing 
countries (newly industrialized countries could also 
contribute to a solution here) (5). 
(4) ESC opinion on relations between the European Community, 
Japan and the USA (rapporteurs: Mr Curlis and Mr Staratzke) 
(OJ No C 328, 22. 12. 1986). 
(5) ESC opinion on the impact of current US economic and 
political developments on the Uruguay Round and inter­
national trade (rapporteur: Mr Romoli) (OJ No C 232, 
31. 8. 1987). 
No C 221/38 Official Journal of the European Communities 28. 8. 89 
4. Conclusion 
4.1. In the Committee's view, the overriding objec­
tive of the internal market is for all the Community's 
citizens to benefit from the economic advantages of the 
new boosts to trade, including trade with non-EEC 
countries. 
4.2. The Committee would urge the Commission to 
bear this objective in mind during its negotiations with 
Done at Brussels, 12 July 1989. non-EC countries, and to take all necessary measures 
to stave off any adverse social or employment effects. 
4.3. The Committee fully supports moves to com­
plete the internal market, but stresses that the market 
should be open to other economic blocs, not closed. It 
therefore urges the Council and the Member States to 
act coherently, as the single market is the stepping stone 
for accomplishing the Community's ultimate objective: 
European economic and monetary union. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE