ABSTRACT
As the European Community nears the end of its massive project to transform the economies of 12 countries into a single market of more than 340 million people, it is worthwhile to assess the progress to date and to measure the potential effects on the Community’s trading partners. The process of reducing all barriers to the movement of goods, people, services and capital, delayed for 20 years by member state fears over loss of sovereignty, the oil shock and the recession, began again in the mid-eighties. Momentum was provided by pressure from European business, a few landmark court cases and the leadership of a remarkable group of commissioners in Brussels. These factors made possible the issuance of a plan (the White Paper and its 282 legal changes needed to get to 65the single market) and the amendment of the EC constitution to allow for majority voting on many of these legal proposals.
What has brought the Community to the present state in which almost all of the important proposals have been adopted has been a demonstration of resourcefulness and flexibility by Brussels and the strength of the market forces released in the process. As restrictive national rules in the areas of public procurement, transportation, financial services, telecommunications, environmental pollution and standards have been dismantled, the costs of doing business across borders in Europe look set to drop dramatically. This has convinced the member states of the value of “pooling” their sovereignty in order to increase the economic growth and competitiveness of Europe.
There are just a few sticking points to be resolved, including how to implement the goal of free movement of people, animals and plants across borders, and how to legislate the worker rights proposals in the Social Action Program. Of more concern is the fact that the rate of member state application of the already-adopted EC-92 directives has lagged and enforcement of some of those directives incorporated in member state law has been lax.
U.S. firms stand to gain from the progress achieved in moving toward EC-wide standards and liberalized public procurement and in opening up the telecommunications, financial services and transport sectors. The Community has, after expressions of concern from the United States and other trading partners, revised some EC-92 proposals, including those dealing with banking and standards-setting, testing and certification. The U.S. film industry has not been successful in getting the EC to remove local content provisions in the TV directive; credit card companies are concerned about proposed rules governing protection of personal data; and chip makers see a “forced investment’’ policy emerging from EC rules on origin, dumping, and procurement. Many U.S. firms have decided to establish production in Europe in order to avoid potential problems in implementation of EC product standards and public procurement programs.
Successful completion of the single market program will provide benefits to U.S. companies located in Europe and increase EC demand for U.S. exports, but it will also make EC firms more competitive in the global market. The framers of the EC-92 program did not set out to build a “fortress Europe.” Vigilance will be required on the part of the United States, however, to assure that the Community and the member states do not stray from the game plan in important areas such as procurement, support for industry, and competition policy.
