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TRADE POLICY IN THE CONTEXT OF BULGARIA’S ACCESSION TO THE EUROPEAN UNION
Part 4
Integration into the Internal Market of the European Union
 

Article 237 of the EEC Treaty provides that "Any European State may apply to become a member of the Community. It shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the assent of the European parliament which shall act by an absolute majority of its component members".

 

Conditions and criteria for membership of the associated countries from Central and Eastern Europe have been set out by the European Council meeting of Copenhagen in June 1993. The European Council agreed that the associated countries that so desire shall become members of the European Union. Accession will take place as soon as the associated country is able to assume the obligations of membership by satisfying the economic and political conditions required as set out in the conclusions of that meeting.

The European Council meeting of Essen in December 1994 while approving a strategy to prepare the associated CEEC for accession emphasised that the essential element of this strategy is the progressive preparation for integration into the internal market of the European Union.

 

The phased adoption of the Union’s internal market acquis (progressive harmonisation of legislation) will assist the process of accepting the existing body of EC legislation related to free movement of goods upon accession.

 

 

1. Harmonisation of legislation - the White Paper

 

The European Council meeting of Cannes in June 1995 welcomed the White Paper prepared by the Commission on preparation of the associated countries for integration into the internal market of the Union at the time of their accession. It considered that the White Paper is a useful guide for those countries in the context of the process of reform already initiated and of implementation of the Europe Agreements.

The White Paper emphasises the importance of the internal market for achieving the objectives of the Union. In particular the internal market contributes to sustainable, balanced and environment-friendly growth, to greater economic and social cohesion, to a high level of employment and social protection and to a higher standard of living and a higher quality of life. The internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. It requires a high level of mutual trust and equivalent regulatory approaches.

 

The successful accomplishment of the task of preparing for integration into the internal market presupposes appropriate assistance by the Community and its Member States. Improved co-ordination in granting assistance in this area will raise its effectiveness.

 

At the same time the establishment of an internal structure in Bulgaria in charge to make full use of the offered facilities will contribute to the success of national efforts.

 

It is of a particular importance to draw on the experience of Member States in transposing Community law into national legislation (an indispensable condition for the proper functioning of the internal market). It is considered that the proper application of Community law depends on: proper and effective transposition of common rules; proper administrative co-operation; confidence and openness between administrations; effective, efficient and uniform application of legislation in all Member States.

 

To this effect the experience of individual Member States in transposing the 219 measures listed in the 1985 Single Market White Paper will be of great help to Bulgaria.

 

It is understood that the creation of the conditions for establishing a single market is dependant upon putting into place legislation and regulatory systems, standards and certification methods compatible with those of the European Union.

 

2. The internal market - objectives and framework

 

The internal market initiative was launched the mid-1980s with a view to refocusing and revitalising EC integration. The elements were out in the Commission’s White Paper on Completing the Internal Market of 1985. This identified a wide range of barriers perceived to hamper the flow of goods, services, persons, and capital among Member States, and established a timetable for their abolition by the end of 1992.

 

The Single European Act of 1987 reinforced the Communities’’ legal and institutional framework in view of the internal market objectives. The Single European Act introduced into the EEC Treaty the target date of 31 December 1992 for achieving "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured" (Article 8a).

 

The economic integration within the internal market goes further than other forms of co-operation such as free trade areas, customs unions and common markets which retain their physical frontiers. It allows the promotion of a more efficient allocation of the factors of production, larger scale of production, improvement of economic performance through greater competition and stimulates investment.

 

The market without internal frontiers relies on a high level of mutual confidence and equivalence of regulatory approach. Any substantial failure to apply the common rules in any part of the internal market puts the rest of the system at risk and undermines its integrity.

 

The basic rules to ensure the achievement of the conditions for the establishment of the international market are defined in the EEC Treaty. Another fundamental principle is established by the European Court of Justice in its rulings interpreting the Treaty: the principle of mutual recognition. Any good circulating legally in one member State shall be free to circulate in any other part of the Community, except where a Member State can demonstrate that the rules of the Member State of origin do not afford equivalent protection of the essential public good. This principle ensures the free movement of goods within the Community without recourse to legislation at the Community level. Should common regulations prove necessary, these should, whenever possible be limited to defining essential health and safety requirements.

The Commission is required, when preparing its proposals for harmonisation of national legislation concerning health safety, environmental protection and consumer protection to take as base a high level of protection.

 

In appropriate cases, harmonisation measures must include a safeguard clause allowing Member States to take provisional measures for health, safety, environmental and similar reasons. Invocation would be subject to a Community control procedure. Such provisions are part of many directives concerning pharmaceuticals and food.

 

The legal framework for the establishment of the internal market, besides the provisions of the Treaty and the rulings of the European Court of Justice comprises also secondary legislation.

 

In accordance with the Treaty most internal market legislation is in the form of Directives, which are binding on the Member States. Directives are sometimes relatively detailed, in other cases they establish only broad aims or essential conditions. In order to become legally effective, national implementing legislation is necessary.

 

At the top of the hierarchy of EC legal instruments (under Article 189 of the EEC Treaty) are the Regulations which are directly applicable and binding in their entirety in all Member States. They need no enabling legislation. There are also some Decisions, instruments which are binding on those to whom they are addressed.

 

Since 1986, the Commission has published annual progress reports on the implementation of the Internal Market Programme. In its recent reports the European Commission indicated that Member States are still expected to make progress in a number of areas in which the Single market is not yet a reality, in particular: the abolition of frontier controls on persons (which at present exists between Schengen countries alone in a non-EC framework); the fiscal environment for business; company law and protection of intellectual property; liberalisation of public sector services (theoretically achieved but still imperfect).

 

 

3. The Internal market legislation related to free movement of goods - key sectors, stages and measures involved

 

The market concept refers to a trading area devoted wholly to the sale of products. The single market rests on the assumption that goods traded on the market of one Member State of the Community can move freely through the other Member States. Hence to ensure the free movement of goods within a single market all tariff barriers (customs duties and charges having an equivalent effect) and non-tariff barriers (any other measures making imports more difficult or costly) must be removed.

 

One of the fundamental aims with a view to completing the internal market has been the abolition of quantitative restrictions and measures having equivalent effect which constitute barriers to trade within the EU.

 

3.1. EC legislation concerning the production and marketing of goods

In areas where the principle of mutual recognition (as described above) could not apply because of the divergence in national legislation which thus had "an equivalent effect" to tariffs or quantitative restrictions the approach to technical harmonisation has been to establish a limited number of essential requirements and leave more detailed rules to be made up by other standard-making bodies on a voluntary basis.

 

In other areas (especially food and medicines, motor vehicles) the approach of full harmonisation is applied.

 

These rules taken together with the principle of mutual recognition, ensure that a producer, manufacturer or importer anywhere in the Community can introduce a product on the market and can market it anywhere else in the EU without falling foul of local rules.

 

A Member State must not only be able to create the conditions for the production of goods which correspond to Community standards (this applies to any country which exports to the Community), but also be able to guarantee that all goods on its market meet those standards.

 

The system thus requires the right legislation in all Member States but also the full framework of technical and other structures necessary to ensure the effective implementation of such legislation. Those structures (testing laboratories, metrology institutes or customs posts at the external border of the Community) need to win the confidence of the Community as a whole if the principle of mutual recognition is to be applied.

 

For the application of the principle of mutual recognition the following primary conditions are to be fulfilled:

 

- the existence of product safety certification bodies operating in accordance with the same rules as similar bodies in existence in the EU;

- the existence of laboratories carrying out tests on products requiring it, e.g. certain food products containing additives or vitamins). These would be either private or public laboratories whose tests would be recognised in other Member States of the EU;

- the existence of product monitoring machinery (e.g. authorisation procedure for products containing certain substances such as vitamins or additives: authorisation procedure for parallel imports of medicinal products).

 

The prerequisites to ensure free movement of goods in the pre-accession stage with a view to future joining the internal market are not only the abolition of tariffs and quantitative restrictions at the border, but also to ensure that measures with equivalent to tariffs and quantitative restriction effect are eliminated (the technical barriers to trade).

 

The instruments to ensure free circulation of goods within the territory of the Union are:

 

- the principle of mutual recognition of legally marketed goods;

- technical harmonisation of legislation;

- the mechanism to prevent erection of new barriers to trade;

 

To achieve the principle of mutual recognition the following preconditions are to be taken into account:

 

- recognition of certification bodies;

- recognition by Member States of tests carried out in Bulgaria and vice versa;

- recognition by EU Member States of products legally manufactured and/ or marketed in Bulgaria and vice versa.

Technical harmonisation is intended to remove regulatory barriers to trade by bringing about convergence in national technical legislation, intended to ensure the achievement of public policy goals such as public health, safety and environmental protection.

 

In elaborating its technical harmonisation legislation the Union has adopted two different philosophies:

 

- the so-called New Approach; and

- the Sectoral Approach.

 

The New Approach Directives are limited to fixing essential requirements on general issues such as safety, health and environment. Voluntary standards, drafted by private sector European standardisation bodies, offer suitable but not compulsory, technical solutions to meet the essential requirements. Assessment of conformity with the essential requirements is governed by the provisions of Council Resolution of 21 December 1989. This provides specific conformity assessment procedures and the institution of independent "notified bodies", mainly from the private sector, authorised to carry out the conformity assessment procedures.

 

Under the New Approach are regulated families of products such as pressure vessels, electromagnetic compatibility, machinery, personal protection equipment, gas appliances, medical devices, non-automatic weighing instruments, appliances burning gaseous fuels, construction products and equipment for use in potentially explosive atmosphere.

 

The Sectoral Approach is applied in respect of foodstuffs, pharmaceuticals, motor vehicles and chemical products, i.e. sectors where public health and safety are directly concerned.

 

3.2. Current status of legislative and institutional framework in Bulgaria; stages and measures to be implemented to achieve alignment with the EU legislative and regulatory system

 

Under Bulgarian legislation standards are mandatory. The Bulgarian standardising body is the Committee on Standardisation and Metrology.

 

The Bulgarian standards and technical regulations are based on internationally agreed rules, following an intensive process of harmonisation of the existing standards. In accordance with a Regulation issued by the Committee on Standardisation and Metrology "where relevant international standards exist they may be adopted as national standards".

 

The legislative and institutional framework for the Conformity Assessment Procedures is being created (no such practice existed in the past). A network of laboratories is in the process of being established.

 

The transposition of the "mandatory" status of the standards under Bulgarian legislation into the "voluntary’ status of the standards will be a complex and costly process.

 

To achieve legislative alignment involving also technical harmonisation requires adaptation of the former rigid system to a new system whose objective is to suppress barriers to trade and allow free movement of products.

 

Therefore much efforts will be needed to bring the system of standardisation into line with that of the Union.

 

In the first place, a clear distinction is needed that standardisation is a process based on consensus of interested parties rather than being centrally dictated and is for voluntary application of economic operators rather than for mandatory application enforced by the public authorities.

 

Following the changes of attitude towards the standardisation process it will be necessary to ensure that the standards bodies have at least "arm’s length" autonomy or preferably independence from Government.

 

Furthermore an open and firm commitment is needed to the principle that standards are voluntary. The approach of the national authorities towards standardisation has to be based on the principle that specifications are prepared by consensus but are intended for voluntary application.

 

The national bodies charged by the authorities with the task of preparing specifications should be capable in practice of carrying out the national work necessary to implement those European and international standards that are used in the context of European policy. Such bodies require the capacity to reach consensus to formulate national viewpoints, to carry out public enquiry, to transpose European standards as national standards, to ensure that no new national standards are introduced at the preparation phase of the European standard and to withdraw conflicting national standards. Such standards bodies must be capable of converting the entire scope of the European standards bodies, CEN (European Committee for Standardisation), CENELEC (European Committee for electro-technical Standardisation), ETSI (European Telecommunications Standardisation Institute).

 

The second stage will involve the complete adoption of the corpus of European standards as voluntary national standards. This will imply that the basic measure have been taken and that the standards bodies have the full capacity to undertake the necessary actions.

 

As far as conformity assessment is concerned the general precondition for the alignment of conformity assessment is respect for the related principles established in the WTO TBT Code as follows:

- transparency in the regulatory system;

- regulations should be restricted to the protection of public policy interests (safety and protection of health, the environment and consumers);

- development of conformity assessment bodies that are competent, in terms of experience, human resources, facilities and organisation, and that are independent of the regulatory

authorities.

 

The problems to be resolved in adapting the conformity assessment system and regulations include:

- the need to abandon the practice of involvement authorities in the control of product quality characteristics that are related to free trade;

- excessively centralised existing conformity assessment activities;

- insufficiency and obsolescence of means of testing and metrology;

- lack of involvement with international conformity assessment activities;

- the need to develop a culture in which the conformity assessment bodies see themselves as serving industry and helping it to solve its problems.

 

 

Funding under the two PHARE regional programmes PRAQ 91 and 92 may be addressed to resolving these problems.

 

These measures are to be complimented by setting up a system of market surveillance in line with the EU system.

 

The objective to control the market comprises the following obligations for Member States of the EU:

 

- to adopt appropriate legislation providing for legal sanctions against fraud and non-conformity requirements;

- to establish specialised laboratories (public or private) that are able to assess the conformity of products with legislation;

to train enforcement officers in order to control products already on the market;

- to set up enforcement programmes that indicate the products to be controlled over a certain period, the frequency and nature of controls, etc.

 

On the whole taking into account the current status of legislation and practice in Bulgaria in the area of technical barriers to trade as compared to the EU internal market requirements a co-ordinated approach towards alignment and implementation of Community legislative and institutional framework is needed.

 

This will facilitate the free movement of goods between Bulgaria and the European Union by eliminating obstacles to trade and prepare the integration of Bulgaria into the internal market of the Union.


 

 
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