Non-Fiscal Barriers to the Free Movement of Goods

Creating the single integrated market and ensuring the free movement of goods within its territory is one of the main objectives of the European Community (EU). Articles 34 – 37 TFEU (28 – 31 TEC) are a significant part of these strategies aimed at removing the non-fiscal barriers having a damaging effect on trade between the Member States. Article 28 proclaims that “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between the Member States”.[1]

The problems with defining the measures having an equivalent effect to a quantitative restriction (MEQRs), detection of indistinctly applicable measures and tension between the Community and individual Members’ national regulations are the three main themes arising from the prohibition of both quantitative restrictions (QRs) and MEQRs. [2]

Trying to minimize the hindrances preventing the free movement of goods between the Member States, the European Court of Justice (ECJ) faced the problem of defining these discriminative measures, both distinctly and non-distinctly applicable. The definition provided by ECJ for MEQR is referred to as the Dassonville formula. “All trading rules enacted by the Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions”.[3] This formula shifts emphasis from the discriminatory intent to the effect of the measure imposed.

This definition leaves space for discussion, whether a particular measure in a particular case is to be referred to as MEQR resulting in limiting hindering the free circulation of goods, their import, and export on the territory of the European Union. These were the cases with Irish promo-actions encouraging the citizens for buying domestic goods, for example. The problem with Dassonville’s definition is in its enormous breadth, including “measures having only an indirect, potential effect on trade fall within its scope and therefore breach article 28”. [4]

Due to the lack of robustness in this formulation several remote and occasional measures may be considered MEQRs. “Dassonville formula simply represents a flexible instrument to determine the rule’s scope of application”.[5] While the distinctly applicable quantitative restrictions and MEQRs, when the differentiation between the goods is based on the criterion of their origin, the detection, and evaluation of not distinctly applicable measures when the equal measures for both domestic and imported goods are imposed still result in direct or indirect hindering the free movement of goods, may be problematic.

The legal consequences of enactment of regulations prohibiting the QR and MEQR intensify the tension between the Community’s and individual Members’ national regulations applied for a particular case. [6] The decisions of ECJ are considered to be a primer to internal policies in case of contradiction between them. [7]However, an exhaustive list is included in article 30 enumerating “derogations which allow national measures to take precedence over the free movement of goods where they serve important interests recognized by the Community as valuable”. [8] Thus, measures imposed for preventing the violation of the national, cultural security do not breach article 28.

After the prohibition of QR and MEQR aimed at ensuring the free movement of goods creating ECJ faced the problems of the uncertainty of definition of MEQR and growing demand for harmonization of the Community’s regulation and individual Member States’ interests and policies, demonstrating the inconsistency of regulations and gaps in formulations that need to be filled.

References

Barnard, C. 2007. The substantive law of the EU: The four freedoms (2-nd ed.), Oxford.

Burgess, M. 2000. Federalism and European Union: The Building of Europe, 1950-2000. New York: Routledge.

Craig, P & de Burca, G., 2007. EU Law: Text, Cases and Materials (4^th ed.). New York: Oxford University Press.

Fairhurst, C. 2007. Law of the European Union (6-th ed.), Edinburgh: Pearson Education.

Folsom, R. 2008. European Union Law in a Nutshell. (6^th ed.), New York: West.

Horspool, M. & Humphreys, M. 2006. European Union Law, Oxford.

Kuilwijk, K. 1996.The European Court of Justice and the Gatt Dilemma: Public Interest Versus Individual Rights? (Critical European Studies Series, V. 1), New York: International Specialized Book Services.

Ortino, F. 2004. Basic legal instruments for the liberalization of trade: A comparative analysis of EC and WTO law, Oxford.

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