EU: Non-tariff barriers for products in the EU Single Market

 

The EU Parliament recently published a Report on tackling non-tariff and non-tax barriers in the single market.

Basically, a non-tariff barrier (NTB) can be defined as a disproportionate or discriminatory regulatory action which results in a burden or cost to be borne by a firm which seeks to enter a market, and which is not borne by firms already in the market, or a cost which accrues to non-national firms which is not borne by domestic firms.

Even though the Single Market is one of the principles of the European Union, such NTBs are still present in the EU and affect the trade with goods and services between the EU member states.

Below, we will focus on the NTBs referring to products since product compliance and environmental requirements are an important aspect of trade barriers and can hinder a free movement of goods.

Generally, the EU requirements for products have been harmonized for many years.  The so-called New Legislative Framework adopted in 2008 establishes a common legal framework for industrial products.  This framework is based on over 20 EU product directives and regulations, the CE conformity assessment and marking and a common market surveillance.  Also technical standards for products developed by the European standardization bodies: European Committee for Standardisation (CEN), European Committee for Electrotechnical Standardisation (CENELEC) and European Telecommunications Standards Institute (ETSI) are the same in all EU member states.

Nevertheless, in spite of this framework, regulatory disparities and inconsistent implementation of EU law as well as additional technical requirements adopted at national level can still complicate cross-border exchanges, force companies to commit resources to the laborious process of analysing EU law provisions and generate excessive and unjustified administrative burdens which could undermine the smooth functioning of the internal market.

An example of the abovementioned phenomenon (not mentioned in the EU Parliament Report, however) are recent product packaging laws from three EU member countries:

• The French Triman Decree: the Decree was published on 29 June 2021 and it mandates the use of the so-called “Triman” logo in the labelling of any product placed on the market for household use and subject to the principles of Extended Producer Responsibility. By forcing economic operators to implement this purely national measure and affix the Triman symbol to their products, the instructions or the packaging, France diverges from common labelling requirements for products in the EU, which causes additional packaging costs and restricts market access.
• The Italian Decree 116/2020: the Decree made it obligatory to label all packaging with the material identification markings (alphanumerical code) and to provide B2C consumers with information about the final destinations of the packaging from 26 September 2020. Sorting instructions are not harmonised across the EU, therefore such obligations at national level create a barrier to the free movement of goods. The requirements are for the moment postponed until the June 2022.
• The Portuguese draft Decree-Law (fifth amendment) amending Decree-Law No 152-D/2017: the draft Decree, if adopted, would implement a duty to use the alphanumerical codes of Decision 97/129/EC and to include sorting instructions, in particular the colour of the recycling bin for all product packages. For the moment, however, it is unclear if Portugal will proceed and adopt the draft Decree, and in what form. These requirements would require specific packaging for the Portuguese market, therefore creating a barrier to the free movement of goods. Sorting instructions and colour codes of bins are not harmonised across the EU and, as a result, this information could be confusing for consumers in other Member States.

Other similar pieces of legislation in other countries may follow in the future.  This would lead to a growing fragmentation of the Single Market for products, weaken the regulatory cohesion of the EU and, as a result, its competitiveness.

Therefore, it is of utmost importance that the EU Commission consistently, speedily and rigorously assess whether such national rules hinder the internal market, and where they do, to assess if they are necessary, non-discriminatory, proportional and justified.  If not, it should take measures to convince the member states to refrain from such legislative initiatives.