The
past weeks the blog series TERRITORIAL DISPUTES introduced the case of Northern
Ireland. In doing that, the first posts presented some of the most
controversial issues that were the pillars of the Brexit campaign. So far, the
posts covered European Union citizenship, free movement of persons, provision
of services, workers, benefits, and family members. Today, the post includes
another freedom: free movement of goods. This is of particular importance for
the United Kingdom (and therefore, Northern Ireland).
Originally,
the principal aim of the European Economic Community treaty was a greater economic
integration via creation of common market involving abolition of obstacles or
restrictions on free movement of goods, services, workers and capital. Free
movement of goods was (and still is) one of the fundamental freedoms on which
the European Union is based.
Art 3(3) TEU) states as an objective of
Community the creation of a common market, furthered now by EMU. The European Union must ensure that all obstacles to free movement of
goods, services, persons and capital are abolished.
Art 26(2) TFEU defines the internal (common/single) market as an area
without frontiers in which there is free movement of goods, persons, services
and capital. Free movement of goods is central to the operation of a common
market because it aims to ensure that imported goods are not placed at disadvantage
by imposition of extra costs. For example, a French exporter of wine into the
United Kingdom would not fear any unfair disadvantage in relation to British
wine producers (and vice-versa) as long as the United Kingdom remains part of
the European Union.
Some basic yet crucial questions: What
is a free trade area? What is a customs union? What is an internal (or single)
market?
Free
Trade Area (FTA): it means a removal of customs duties, border taxes between
states, quotas or limitations on what can be imported but each state keeps own duties
towards countries outside the FTA.
Customs
union: FTA in addition to a common level of duty on goods coming from outside
the FTA. This implies a removal of internal customs or quotas in addition to
the erection of uniform external tariff.
Single/internal
market: it means customs union in addition to free movement of factors of
production. The terms “single market” or “internal market” replaced common
market in 1986 (SEA).
What
about goods coming from third countries outside the European Union?
An European
Union tariff is charged on all goods coming into the European Union from third
countries. It is the same tariff regardless of where the goods enter. The monies
raised are part of the EU budget. The Common Custom Tariff (CCT) is different
from charges levied by a member state as part of their own internal taxation
system. The CCT rates are fixed by the
EU Council on a proposal from the EU Commission.
What is meant by goods in free
circulation?
Once
the CCT is applied to third country goods, they are in “free circulation” in
the Union, not subject to customs duties between member states. These goods are
allowed to move freely between member states exactly like goods originating in the
within the European Union. For example, fruit imported from Latin America by a
Spanish importer into Spain can be moved freely into the United Kingdom without
paying an extra levy. After Brexit, this same procedure would imply not one
(CCT) but two customs duties (one to enter the European Union and one to enter
the United Kingdom of the goods first entered via the European Union into the
United Kingdom).
What does the term “goods” mean within
European Union law?
The term “goods” is used
interchangeably with the term “products.” The European Court of Justice defines it as
follows:
Commission
v Italy (The Art Treasure Case) (7/68): products which can be (1) valued in money and
which (2) are capable of forming the subject of a commercial transaction.
Tomorrow,
the post will introduce financial (pecuniary) and non-financial (non-pecuniary)
barriers prohibited by European Union law in relation to free movements of
goods.
Jorge
Emilio Núñez
Twitter: @London1701
16th July 2018
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