EU's Unified Market Completion is Critically Significant
The European Union (EU) is facing a crucial moment as trade wars and protectionism escalate globally. Amidst these challenging circumstances, it is more important than ever for the EU to focus its efforts on eliminating the obstacles within its internal market. This is according to Paolo Guerrieri, a visiting professor at Sciences Po in Paris and scientific advisor to the Institute of International Affairs.
The European internal market, valued at approximately 18 trillion euros, allows for the free circulation of goods, services, people, and capital throughout the EU. However, it appears that the EU's plans to gain more autonomy in the supply of critical raw materials are being hindered by these very obstacles.
Guerrieri emphasized that there are still very important barriers to trade between EU member states. These barriers, not in the form of tariffs but arising from regulatory, administrative, or procedural differences, create friction and hinder free trade, despite the formal single market framework.
The EU's internal market represents 60% of the bloc's trade in goods, services, and capital. Yet, trade within Europe is less than half the volume of trade between US states, indicating untapped potential for increasing intra-European trade. The elimination of these obstacles could potentially increase intra-European trade and provide more autonomy in the supply of critical raw materials.
Brussels has announced a strategy to eliminate existing trade barriers with the aim of completing and deepening its internal market, which could potentially double its benefits. This strategy involves facilitating the passage of essential services and goods, such as medicines, across borders, ending unfair practices, and simplifying circulation.
However, the road to completing the single market is not without challenges. Spyros Blavoukos, a Professor in the Department of International and European Economic Studies at the Athens University of Economics and Business, emphasized the need to release the untapped potential that the EU already possesses. He underscored that the 27 EU leaders must resist the pressures to erect protectionist barriers within the EU for the bloc to develop its common economic potential.
The plan to eliminate trade barriers was drawn up based on reports by Enrico Letta and Mario Draghi. However, it is essential to note that the national governments continue to be the culprits erecting non-tariff barriers to free trade within the EU, causing a 30-year delay in the realization of the single market.
It is crucial to address these non-tariff barriers effectively to enable true free trade. Typically, solutions to such barriers in the EU context include harmonizing regulations, mutual recognition of standards, simplifying customs and administrative procedures, and strengthening enforcement of single market rules.
Without further specific details on the proposed solutions from Guerrieri or Blavoukos, the focus remains on recognizing that non-tariff barriers are the key problem and their removal or mitigation is essential to completing the EU’s single market. It is also important to consider compensations for sectors that may be negatively affected to maintain the support of European citizens for this key project, ensuring European prosperity in the coming years and even decades.
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The elimination of non-tariff barriers within the EU's internal market, originating from regulatory, administrative, or procedural differences, is essential for the completion of the single market and its potential doubling of benefits, as emphasized by Guerrieri and Blavoukos. In education and self-development, it's crucial for EU leaders to understand and address these barriers, as their removal or mitigation will pave the way for increased intra-European trade and the development of the EU's common economic potential.
