Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee - The Internal Market for Goods: a cornerstone of Europe’s competitiveness
Date: 2007-02-14
Institutions: European Commission
Subjects: competitiveness, consumer protection, free movement of goods, marketing, single market, technical regulations

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.2.2007 
COM(2007)35 final 

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

The Internal Market for Goods: a cornerstone of Europe’s competitiveness 

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

The Internal Market for Goods: a cornerstone of Europe’s competitiveness 

(Text with EEA relevance) 

This Communication is presented in the context on the ongoing Review of the Single Market 
of the 21st Century. As such, it provides a brief analysis of one of the four freedoms – namely 
the  free  circulation  of  goods  -  and  accompanies,  and  explains  a  number  of  concrete  new 
initiatives designed to improve the free movement of goods.  

To date, the most important technical barriers hindering the free movement of goods within 
the  EU  have  either  been  removed  or  have  been  prevented  from  arising.  Enterprises  and 
citizens are generally satisfied with the way the internal market for goods currently operates. 

However,  the  results  of  the  public  consultation  on  the  future  of  the  internal  market 
reveal  a  number  of  outstanding  weaknesses  in  the  internal  market  for  goods,  which 
continue  to  have  a  negative  effect  on  both  businesses  and  consumers.  For  instance, 
stakeholders  consider  that  national  technical  rules  still  mean  that  they  do  not  really  have 
access to free trade in the EU. That also means that consumers will not find these products on 
their national markets and that their choice will be reduced. Stakeholders also complain, for 
example  about  uncertainties  and  inconsistencies  in  existing  EU  requirements  for  the 
marketing of products and about shortcomings in the CE marking on products. Consumers are 
unsure  as  to  the  full  meaning  of  the  CE  marking  and  some  Member  States  are  more 
demanding  than  others  when  applying  the  rules.  Certificates  of  conformity  may  not  be 
recognised in other countries and manufacturers may be subjected to different levels of costs 
from  testing  and  certification  bodies.  Moreover,  many  citizens  are  still  facing  needless 
paperwork and extra costs for registering their car in, or transferring it to, their home country.  

An  integrated,  borderless  internal  market  remains  the  best  way  to  enhance  the 
competitiveness  of  the  European  economy.  Given  that  that  there  is  still  too  much 
bureaucracy,  red  tape  and  uncertainty  involved  in  the  trading  of  certain  products  within  the 
EU, this Communication proposes four new initiatives to further facilitate the free movement 
of  goods  and  to  simplify  and  modernise  internal  market  rules  and  principles,  in  accordance 
with the principles of Better Regulation:  

•  A  proposal  for  a  Regulation  laying  down  procedures  on  the  application  of  national 

technical rules on products lawfully marketed in another Member State; 

•  A proposal for a Regulation on accreditation and market surveillance activities; 

•  A proposal for a Decision on a common legal framework for industrial products; 

•  An  interpretative  communication  on  procedures  for  the  registration  of  motor  vehicles 

originating in another Member State. 

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These four initiatives are vital elements of the re-launched strategy for Jobs and Growth. They 
are  an  integral  part  of  the  new  objectives  and  set  of  initiatives  which  the  Commission  will 
present in the the ongoing review of the Single Market of the 21st century. 

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1. 

INTRODUCTION 

The  Internal  Market  for  Goods  is  a  fundamental  element  of  European  Integration. 
What  started  50  years  ago  as  part  of  a  customs  union,  involving  the  abolition  of 
customs duties inside the European Community since 1968 and the establishment of 
a common external tariff, became over the years one of the major building blocks of 
Europe’s strength and stability. Notwithstanding the huge complexity and size of the 
task, the Community has been able to put in place rather rapidly a legal framework 
that has transformed the lives of citizens and businesses for the better. The internal 
market  for  goods  is  not  only  a  major  catalyst  of  growth  inside  the  Community  but 
also exerts a strong influence on the capacity of the EU to compete internationally. 

This communication is presented in the context of the ongoing review of the Single 
Market of the 21st Century, whose results will be presented in two steps during 2007: 
an interim report foreseen in February 2007 for the Spring European Council, to be 
followed  up  by  more  concrete  proposals  in  autumn  2007.  This  review  builds  on  a 
public  consultation  carried  out  in  2006  and  will  provide  a  global  analysis  of  the 
Single  Market's  four  freedoms.  The  final  report  will  put  forward  a  range  of 
initiatives,  which  will  complement  what  is  outlined  in  the  present  Communication 
and its accompanying proposals. 

This  Communication  accompanies  and  explains  a  number  of  new  initiatives  to 
facilitate  further  the  free  movement  of  goods  against  the  background  that  there  are 
still  uncertainties  and/or  red  tape  involved  in  marketing  certain  products  across  the 
EU.  

2. 

THE INTERNAL MARKET FOR GOODS FUNCTIONS WELL… 

The  internal  market  for  goods  has  tied  the  European  economies  more  closely 
together  and  trade  between  the  Member  States  has  expanded  strongly.  Intra-EU-27 
trade  accounts  for  two  thirds  of  total  trade  and  reveals  the  major  importance  of 
trade between the 27 Member States compared with trade with the rest of the 
world. 

Today  it  would  be  difficult  to  imagine  life  in  the  EU  without  products  from 
outside  one’s  home  country.  In  every  store  in  Europe  there  is  now  a  much  wider 
choice  of  products  of  better  quality.  Even  day-to-day  products  are  not  solely 
manufactured in the home country but come from all over Europe. But it is not only 
EU citizens who reap the benefits of the  internal  market  for  goods.  Businesses  can 
work much more efficiently by cutting compliance costs and through the economies 
of scale offered by the harmonisation of national technical rules. 

In the internal market for goods, almost all the promises that were made in the 1985 
White  Paper  on  the  completion  of  the  Internal  Market  were  kept.  Through  the 
application  of  Articles  28  to  30  EC  Treaty  and  through  secondary  EC  legislation, 
almost all technical barriers to intra-EU trade in goods were eliminated, and in 
particular  obstacles  in  the  supply-chain.  Most  of  the  groundwork  was  done  before 
1992.  The  most  important  remaining  barriers  to  intra-EU  trade  in  goods  are  in  the 
non-harmonised area or in other, equally important areas such as taxation (where the 

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level of  harmonisation is not  sufficient to effectively remove all tax-driven barriers 
and distortions in the Single Market) and intellectual property. 

Surveys  show  that  most  enterprises  and  citizens  are  satisfied  with  the  way  the 
internal  market  for  goods  currently  operates.  The  results  of  a  special  edition  of 
the Internal Market Scoreboard on “10 years of an internal market without frontiers” 
(2002) indicate that 76 % of companies participating in the survey and exporting to 6 
or more other EU countries rated the impact of the internal market on their business 
as  positive.  Over  60  %  of  these  companies  said  that  the  internal  market  had 
contributed to their success in selling their products in other Member States. A recent 
Eurobarometer1 shows that 3 in 4 EU citizens (75%) believe that the internal market 
for goods has a positive impact.  

3. 

…BUT IT IS CHANGING FAST,… 

Since  the  abolition  of  internal  border  controls  as  of  1st  January  1993  the  situation 
inside and outside the European Union has changed dramatically.  

•  The consumer enjoys the benefits of the internal market for goods: since 1993 
the  internal  market  for  goods  has  been  predicated  on  the  elimination  of  all 
technical barriers in the supply chain so that the product could be sold locally to 
the  consumer.  The  product  was  almost  exclusively  offered  for  sale  to  the 
consumer  in  his  Member  State  of  residence.  Gathering  information  on  other 
products for sale elsewhere in the EU was difficult and time-consuming. Now, the 
typical  supply-chain  of  the  early  ‘90s  is  complemented  by  new  supply-chains. 
Due  to  growing  use  of  the  internet,  the  abolition  of  frontiers  within  the  EU,  the 
introduction of the Euro, falling transport costs etc., customers/consumers have a 
much broader choice as to where, when and how they will buy a given product. 
Consequently, they are increasingly buying products (such as motor vehicles) in 
other Member States or from a distance. As a result, enterprises are becoming less 
likely to encounter barriers to trade within the EU, and consumers more and more 
likely to 

•  Product  innovation  goes  very  fast:  New  technologies  are  emerging  that  allow 
the  fast  introduction  of  new  products  and  the  increased  flexibility  of  production 
processes. 

•  Enterprises  have  to  adapt  rapidly  to  new  challenges:  Enterprises  are  now 
facing  major  challenges,  some  of  which  come  from  within  (increasingly  rapid 
technological  development,  skills  gaps),  while  others  are  external  (society’s 
expectations  regarding  consumer,  environmental  and  health  protection).  At  the 
same  time,  a  new  world  economic  system  has  emerged  characterised  by  high 
mobility. EU businesses are confronted with the increased internationalisation of 
the  world  economy  driven  by  improving  transport  links,  falling  communication 
costs,  reduced  barriers  to  trade  and  investment  and  more  vigorous  competition 
with the emergence of new global competitors. 

1 

http://ec.europa.eu/internal_market/strategy/index_en.htm. 

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4. 

… AND THERE IS NO CAUSE FOR COMPLACENCY 

Despite  its  many  successes,  the  Internal  Market  for  goods  is  not  complete.  It 
needs  to  take  account  of  the  latest  technological  advances,  the  global  environment 
and the changing demands of consumers. Improving the Internal Market is a steadily 
ongoing process, requiring constant effort, vigilance and updating. 

The  Commission  launched  a  public  consultation  on  the  future  of  the  Internal 
Market in April 2006. Its results2 show that, although many stakeholders are pleased 
with its considerable achievements, two main difficulties are perceived concerning 
the internal market for goods: 

•  National  technical  rules  still  constitute  important  barriers  to  free  trade 
within  the  EU.  The  weak  application  and  enforcement  of  the  Treaty  rules,  in 
particular in the non harmonised product sectors, is considered a major hurdle, in 
particular for SMEs. Stakeholders argue that national technical rules still lead to 
substantial  obstacles  to  the  free  movement  of  goods  within  the  EU,  resulting  in 
extra  administrative  controls  and  tests.  Stakeholders  consider  that  the  current 
system  of  market  surveillance  needs  considerable  improvement,  as  there  is  no 
consistency  of  approach  in  Member  States.  In  addition,  Member  States  lack 
adequate resources to cope with an ever changing business environment for trade.  

•  Many EU rules are inconsistent or burdensome: Stakeholders complain about 
uncertainties  and  inconsistencies  in  EU  rules.  For  example,  different  definitions 
apply to the same product while other fundamental notions are not defined at all. 
Different  conformity  assessment  procedures  overlap  and  conformity  assessment 
bodies are still confronted with legal obstacles. Stakeholders are therefore of the 
opinion  that  the  regulatory  framework  for  goods  remains  too  fragmented. 
Stakeholders also point to the shortcomings of the CE marking, its actual meaning 
is often misunderstood.  

In addition, new barriers for citizens are gradually emerging, for example in the 
motor vehicles area. The transfer of motor vehicles to another Member State is still a 
major  source  of  complaints,  in  particular  due  to  burdensome  approval  and 
registration  procedures.  Approval  procedures  for  already  used  motor  vehicles  are 
often slow and expensive and sometimes lead to a prohibition to use a car that was 
previously  lawfully  used  on  the  roads  of  another  Member  State.  Registration 
procedures  of  cars  originating  in  another  Member  State  frequently  require  heavy 
administrative formalities. 

5. 

TURNING TO SOLUTIONS 

The  results  of  the  public  consultation  on  the  future  of  the  Internal  Market  are 
unambiguous:  the  quality  of  EU  legislation  on  goods  needs  to  be  improved  and 
there is a strong need to pay more attention to citizens’ needs and interests in the 
Internal Market for goods.  

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SEC(2006)1215 of 20.09.2006. 

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The  Commission  is  therefore  coming  forward  with  four  different  initiatives, 
namely: 

•  A proposal for a Regulation of the European Parliament and of the Council laying 
down procedures relating to the application of certain national technical rules to 
products  lawfully  marketed  in  another  Member  State  and  repealing  Decision 
3052/95/EC; 

•  A  proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council 
setting out the requirements for accreditation and market surveillance relating to 
the marketing of products; 

•  A  proposal  for  a  Decision  of  the  European  Parliament  and  of  the  Council  on  a 

common framework for the marketing of products;  

•  An  interpretative  communication  on  procedures  for  the  registration  of  motor 

vehicles originating in another Member State.  

The objective of these actions is to resolve some of the main difficulties relating to 
the internal market for goods that emerged from the public consultation on the future 
of the Internal Market, by offering the following solutions: 

5.1. 

Eliminating important barriers to free trade caused by national technical rules 

The principle of free movement of goods is set out in the EC Treaty and is directly 
applicable  in  all  Member  States.  The  Treaty  obliges  Member  States  to  accept 
products  lawfully  manufactured  or  marketed  in  another  Member  State  which 
are  not  subject  to  Community  harmonisation,  unless  the  trade  restriction  can  be 
specifically  justified  on  the  basis  of  overriding  requirements  in  the  general  public 
interest, such as the protection of human health or the protection of the environment. 
This means that certain national barriers may be justified, while others may not. 

In practice, however, technical obstacles to the free movement of goods within the 
EU  are  still  widespread.  Technical  obstacles  are  created  by  national  rules  that 
oblige enterprises to adapt products lawfully marketed in the Member State of origin 
to  the  rules  of  the  Member  State  of  destination.  In  one  survey,  about  35%  of 
enterprises  reported  problems  with  technical  rules  in  another  Member  State  and 
about 50% of enterprises decided to adapt their products to these rules3.  

Several  factors  explain  why  these  obstacles  still  exist.  Many  enterprises  lack  the 
expertise,  time,  adequate  human  resources  and  money  to  assert  their  rights  in  the 
Member  State  where  they  intend  to  sell  their  products.  There  is  also  a  widespread 
lack of awareness of enterprises  and national authorities about the principle  of free 
movement of goods. They often face legal uncertainty about the burden of proof in 
case  of  discussion.  Moreover,  enterprises  run  a  risk  when  they  decide  to  market  a 
product in another Member State. It is difficult for businesses to find out beforehand 
if they can sell their products lawfully in another Member State. Although the Court 
of  Justice  confirmed  the  principle  that  Member  States  are  obliged  to  compensate 

3 

Second Biennial Report on the Application of the Principle of Mutual Recognition in the Single Market 
- COM(2002)419final of 23 July 2002. 

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individuals  for  loss  and  damage  caused  by  breaches  of  directly  applicable 
Community  law  for  which  they  can  be  held  responsible,  this  uncertainty  leads  in 
practice  to  risk  avoidance:  enterprises  will  “play  it  safe”  by  avoiding  any  possible 
conflict  or  discussion  with  the  national  authorities  of  the  Member  State  of 
destination. 

The principle of free movement of goods is enshrined in the Treaty and has been 
the  subject  of  numerous  rulings  of  the  Court  of  Justice.  Efforts  to  make  it  fully 
operational must be strengthened so that products lawfully marketed in one Member 
State  can  easily  be  marketed  elsewhere  in  the  EU.  The  proposal  for  a  Regulation 
laying down procedures relating to the application of certain national technical rules 
on  products  lawfully  marketed  in  another  Member  State  and  repealing  Decision 
3052/95/EC  therefore  ensures  that  enterprises  can  rely  on  this  Treaty  principle  and 
that national administrations have the tools to implement it.  

The  philosophy  of  the  proposal  is  transparency  and  efficiency:  transparency  of 
information to be exchanged between enterprises and national authorities, efficiency 
by avoiding any duplication of checks and testing, whilst allowing Member States to 
maintain  a  high  level  of  protection  of  their  consumers  and  the  environment.  In 
particular,  the  proposal  addresses  the  burden  of  proof  by  setting  out  the procedural 
requirements  for  denying  the  market  access  of  a  product.  The  proposal  establishes 
that the Member State of destination must justify in writing the precise technical or 
scientific  reason  for  its  intention  to  refuse  the  access  of  the  product  to  the  national 
market. The economic operator will also be entitled to defend his case and to submit 
solid arguments to the competent authorities. 

5.2. 

Getting products onto the market: safety first! 

The gradual development of the internal market for goods has created a patchwork 
of  different  rules  and  procedures.  Some  of  them  are  very  burdensome  for 
enterprises  and  supervisory  authorities  and  cause  unnecessarily  high  administrative 
costs  and  legal  inconsistencies  for  application.  Although  originally  designed  to 
increase  health  and  safety,  technical  regulations  can  also  become  instruments  for 
market protectionism. 

Firstly, the rules on the conformity assessment of products must be made much less 
complicated for enterprises and authorities. As it stands, some products must undergo 
different procedures to meet the requirements of several different directives. In many 
areas, enterprises have to ensure compliance not only with one piece of legislation, 
but with a variety of legal instruments. Due to different wording and concepts it gets 
more and more difficult for enterprises to understand their legal obligations. They are 
forced  to  have  increased  recourse  to  legal  expertise  in  order  to  implement  the  law 
properly.  In  some  cases  manufacturers  are  even  forced  to  go  to  different  testing 
bodies  to  have  the  same  product  certified  under  different  directives.  Moreover,  an 
independent  and  authoritative  attestation  of  the  competence,  impartiality  and 
integrity of conformity assessment bodies has become necessary. 

Secondly, market surveillance activities are crucial to protect the consumers from 
unsafe or non-compliant products. The safety of the European market place depends 
to a great extent on the active and uniform enforcement of Community product safety 
requirements.  However,  national  authorities  lack  the  necessary  means  to  apply 

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market surveillance efficiently and consistently. They are constantly confronted with 
new  challenges,  for example fast changing economies, new products on the market 
and  increasing  number  of  third  country  imports.  In  addition,  the  increased 
internationalisation  and  complexity  of  commercial  transactions  make  it  more  and 
more difficult to identify the actors in the distribution chain and authorities are often 
unable to find the right person to address when there is a problem. 

The way in which market surveillance is currently organised in Europe is no longer 
adequate  for  an  internal  market  without  internal  borders.  Products  circulate  freely 
inside  the  Community  without  passing  any  internal  checkpoints,  but  the  powers  of 
national authorities are limited to their own territory.  

The consequence  is  that  unsafe  products slip through the net and are placed on the 
market. These products often constitute a health and financial risk for the consumer. 
This situation also creates an unfair competitive advantage for operators not playing 
to  the  rules,  especially  in  price-sensitive  areas.  By  not  observing  material  or 
procedural requirements,  they  can  make important  savings on the compliance costs 
and  consequently  offer  their  products  to  lower  prices  than  their  competitors  who 
respect the law 

Therefore,  market  surveillance  activities  need  to  be  coordinated  and  strengthened 
throughout the internal market without frontiers, where often concerted, Europe-wide 
action is needed.  

Thirdly, the CE marking needs much better protection. In theory, the role of the CE 
marking  is  simple:  it  shows  to  enforcement  authorities  and  to  consumers  that  the 
manufacturer declares that he has applied all applicable EC directives. A product that 
carries  the  CE  marking,  therefore,  benefits  from  free  circulation  inside  the 
Community.  

Furthermore, many traders inside and outside the EU do not always understand the 
meaning of the CE marking, and a number of products bearing the CE marking do 
not comply with the legislation. These products normally do not offer the same level 
of safety as compliant products and therefore constitute a major risk for consumers. 
Moreover,  non-compliant  products  could  be  produced  at  lower  cost.  This  situation 
therefore  creates  an  unfair  competitive  advantage  for  operators  not  playing  to  the 
rules. 

The proposal for a Decision on a common framework for the marketing of products 
will  streamline  the  various  conformity  assessment  procedures  for  products  in 
order to avoid overlaps and to cut down burdensome procedures. It will also present 
harmonised provisions for future legislation. 

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In parallel with this proposal, the Commission will ensure the legal protection of the 
CE marking by its registration as a collective mark. This new protection will allow 
public authorities to take rapid and efficient action against abuses. It will also protect 
businesses that respect the rules against rogue traders who put the CE marking on a 
product that does not offer the high level of protection that is required in Europe. 

The  proposal  for  a  Regulation  setting  out  the  requirements  for  accreditation  and 
market  surveillance  relating  to  the  marketing  of  products  will  facilitate  conformity 
assessment  through  accreditation  of  laboratories  and  testing  houses,  so  that  their 
certificates and test reports will be readily accepted throughout the EU. 

The safety of the consumer remains at the forefront. The proposal for a Regulation 
setting out the requirements for accreditation and market surveillance relating to the 
marketing of products will therefore also strengthen market surveillance activities 
throughout  the  EU,  so  that  non-compliant  products  can  be  easily  identified  and 
withdrawn from the market.  

5.3. 

Helping citizens to transfer their car to another Member State 

The  Commission  promised  in  the  Citizens’  Agenda4  to  lift  specific  barriers  for 
citizens.  Barriers  often  arise  when  citizens  purchase  motor  vehicles  in  another 
Member  States.  While  several  measures  (for  example  the  EC  whole  vehicle  type-
approval (WVTA) system and the new block exemption regulation on the application 
of the competition rules to motor vehicle sales and servicing) made the cross-border 
purchase  of  motor  vehicles  significantly  easier,  many  citizens  are  still  facing 
needless paperwork and extra costs for registering their car in, or transferring it to, 
their  country  of  residence.  The  many  practical  problems  caused  by  bureaucratic 
registration  formalities  still  constitute  an  impediment  for  citizens  to  purchase  their 
car abroad.  

It is likely that most of these problems will disappear in the long term, when all cars 
will have the harmonised registration certificate. 

The  Commission  has  therefore  opted  for  the  publication  of  an  interpretative 
communication  on  procedures  for  the  registration  of  motor  vehicles  originating  in 
another Member State. The communication gives a comprehensive overview of the 
principles  of  EC  law  that  apply  to  the  registration  of  vehicles  in  a  Member  State 
other than the State of purchase, and to the transfer of registration between Member 
States,  in  the  light  of  recent  developments  in  European  legislation  and  in  the  case-
law of the Court of Justice.  

The  communication  will  serve  as  a  basis  for  a  Citizen’s  guide  on  the  transfer  of 
vehicles within the EU. 

4 

COM (2006) 211 of 10.05.2006 

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6. 

CONCLUSION 

One  of  the  main  priorities  of  the  European  Commission  is  to  make  the  Internal 
Market  for  goods  work  better  for  enterprises  and  citizens.  The  fundamental 
requirements  are  not  so  different  to  what  they  were  in  1985  when  the  Commission 
published its White Paper on the Completion of the Internal Market and in 1993 with 
the introduction of a single European market. Now, as then, an integrated borderless 
market is the best way to enhance the competitiveness of the European economy. A 
better  functioning  Internal  Market  for  goods  is  thus  a  critical  element  of  the  re-
launched strategy for Jobs and Growth to enable the EU to compete and succeed in a 
globalised  economy,  in  which  our  main  trading  partners  have  large  and  unified 
markets.  These  four  initiatives  are  an  important  step  in  this  direction.  They  are  an 
essential part of the new Single Market Strategy for the 21st century. 

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