The European internal market, also referred to as the single market, allows people and businesses to move and trade freely across EU members. In practice, it gives consumers a wider choice of items to buy at competitive prices; allows them to enjoy greater protection when shopping at home, abroad or online; and makes it easier and cheaper for companies both large and small to do business across borders and to compete globally. It also gives individuals the right to earn a living, study or retire in another EU country.
The cornerstones of the single market are the free movement of goods, services, capital and people known collectively as the ‘four freedoms’, which are enshrined in the EU Treaty. The same treaty empowers EU institutions to adopt laws (in the form of regulations, directives and decisions) that take precedence over national law and are binding for national authorities. The European Commission plays an important role in ensuring that EU law is properly applied throughout the EU – by individuals, national authorities and other EU institutions.
Free movement of goods in harmonized and non-harmonized sectors
One ways in which the EU’s single market rules make it easier to do business in Europe is through mutual recognition, which ensures that national technical rules do not stand in the way of the free trade of goods within the EU. Subsequently, a product lawfully produced or marketed in one member country may be sold in any other member country.
Many products on the EU market are subject to harmonized rules that protect consumers, public health, and environment. Harmonized rules preclude the adoption of possibly divergent national rules and ensure the free circulation of products within the EU. However, some sectors are still governed by national provisions. The principle of free movement of goods ensures that these provisions do not lead to the creation of unjustified barriers to trade.
Harmonized sectors are subject to common rules across the EU, which can have two forms:
- In the majority of sectors (e.g. electronic and electric equipment, machinery, lifts, medical devices), EU legislation is limited to essential health, safety, and environmental protection requirements. In order to demonstrate compliance with these requirements, manufacturers may voluntarily use standards or other technical specifications. Standards ensure interoperability and safety, reduce costs and facilitate companies' integration in the value chain and trade. Technical harmonization is made effective via directives or regulations, some of which make CE marking compulsory. Businesses thus certify that their goods comply with legislative provisions, in particular as regards health and safety. This marking, which is compulsory for the relevant goods, means that they are able to move freely throughout the EU.
- In other sectors (e.g. automotive, chemicals), legislation provides detailed requirements obliging certain types of products to have the same technical specifications.
The harmonized rules provide a clear and predictable legal framework for businesses. If manufacturers follow these rules, their products can be sold freely on the market.
Non-harmonized sectors are not subject to common EU rules and may come under the national rules. This means that national rules on these products are subject to a notification procedure that ensures they do not create undue barriers to trade.