9 Internal market for industrial products
| (35758)
5742/14
COM(14) 25
| Commission Communication: A vision for the internal market for industrial products
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| Legal base | — |
| Documents originated | 22 January 2014
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| Deposited in Parliament | 29 January 2014
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 12 February 2014
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| Previous Committee Report | None; but see footnotes
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| Discussion in Council | See para 9.15 below
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 The Commission notes that it is 20 years since
the establishment of the single market, and that strengthening
its effectiveness was identified as a priority in a Communication[43]
it put forward in October 2012 updating the EU's Integrated Industrial
Policy. It says that it has therefore carried out an evaluation
of EU law in the area of industrial (ie. manufactured non-food)
products to assess its overall coherence and to obtain evidence
of its cumulative effects from an industry perspective. It has
now set out in this document the results of that exercise, and
of a public consultation with stakeholders.
The current document
9.2 The Commission notes that the internal market
for products has been a frontrunner in EU economic integration,
with regulatory obstacles having been prevented by Directive 98/34/EC,[44]
or eliminated through the principle of mutual recognition, or
through Union harmonisation legislation (which has also guaranteed
free movement by replacing national rules, as well as high levels
of health, safety and environmental protection). It also points
out that the acquis has gradually expanded, with there
currently being more than 30 directives and regulations, covering
both specific products and applying horizontally across different
product groups.
Benefits of the internal market
9.3 The Commission says that, since the start of
the single market, intra-EU trade in goods as a share of GDP has
increased from 17% to 22%; that it represents a very high percentage
of GDP in most Member States; that between 2000 and 2012 its rate
of growth has exceeded that of total EU manufacturing value; and
that, whilst there are significant differences between sectors,
most have experienced an increase in the level of intra-EU trade,
particularly between 2003 and 2008. The Commission goes on to
suggest that better access to the internal market, combined with
regulatory and product convergence at European level, has led
to greater economies of scale and thus enhanced competitiveness,
has reduced the cost of regulatory compliance, and has also enhanced
innovation and the take-up of the results of research and development.
The evolution of EU law
9.4 The Commission notes that, since 1985, the EU
has laid down essential safety, health and other public interest
requirements with which businesses must comply, with the reduced
divergence of national technical regulations having brought about
a single, borderless market, with corresponding economic and employment
benefits. It adds that the formulation of these requirements has
relied heavily on inputs from manufacturers and other businesses
in the supply chain, as well as from consumers, environmentalists
and trade unions; that Member States are responsible for developing
national implementing rules, and ensuring effective implementation,
market surveillance and enforcement; and that the Commission itself
has an important over-arching role in monitoring and evaluating
implementation, assessing the scope for possible regulatory changes,
and pursuing breaches of EU law. However, it also says that, although
in principle the administrative requirements are clear, in practice
anomalies and differences have emerged, and that there was therefore
an urgent need to standardise and ensure greater consistency.
As a result, there has since 2009 been a number of sweeping reforms,
with a revision of directives applying to a wide range of products,
as well as two horizontal legislative proposals on market surveillance
and consumer product safety, and with an investigation having
recently been launched into the principle of mutual recognition
(which the Commission describes as one of the pillars of the single
market).
Review of EU legislation on industrial products
9.5 The Commission says that an independent assessment
of the day-to-day functioning of Union legislation on industrial
products concluded that it is relevant to meeting EU objectives,
but that the following changes should be made:
Improved architecture
9.6 This involves the use of regulations rather than
directives (so as to eliminate differences in the timing of implementation,
as well as in transposition and implementation); the need for
periodic reviews to ensure that legislation is still achieving
its objectives; consideration of a horizontal regulation setting
out definitions and other common elements applying across EU legislation;
regular updating of non-binding guidance on compliance; and the
need for the development of measures relating to product use (such
as installation and maintenance), where national measures can
also impose barriers.
Strengthening effectiveness
9.7 This would involve greater participation of small
and medium sized enterprises (SMEs), consumer organisations and
associations of professional users in the preparation of EU legislation
and in standardisation processes; encouraging national standards
organisations to make abstracts of harmonised standards available
free of charge on their websites; a faster transition towards
"e-market surveillance", with compliance information
being made available online as far as possible; facilitating a
transition towards paperless market surveillance; promoting a
greater use of e-labelling; and integrating new product groups
into existing pieces of Union harmonisation legislation for industrial
products, rather than promoting new legislation.
Strengthening implementation
9.8 The Commission says that continued support should
be given to mechanisms to facilitate cooperation and the exchange
of information between it and market surveillance authorities;
that the use of accreditation should be further strengthened;
that synergies should be fully exploited between different elements
in the implementation regime (such as SOLVIT, the Enterprise Europe
Network and Product Contact Points); and that the role of Product
Contact Points should be expanded.
Reducing administrative burdens
9.9 The Commission says that, although health and
safety requirements limit the scope for SME exemptions, an analysis
of the effect on them ("the SME test") should always
be applied to ensure that administrative requirements do not impose
disproportionate burdens; that firms should have available a single
reference source on changes made to EU harmonisation legislation;
that businesses should continue to be allowed to choose between
producing a single declaration of conformity and a different declaration
of conformity for each piece of applicable Union harmonisation
legislation; and that industry is not over-burdened with too frequent
legislative changes.
Extending the reach of EU product harmonisation
legislation
9.10 The Commission proposes to promote international
convergence in legislation and technical standards so as to lower
compliance costs, and, in addition to the steps currently being
negotiated with the United States under the Transatlantic Trade
and Investment Partnership, it says that further cooperation with
regulators and standards bodies in other key third country export
markets should be explored.
A vision for the future
9.11 The Commission says that the importance of addressing
regulatory barriers will only increase, and that, bearing in mind
the over-riding need to minimise administrative burdens, especially
for SMEs, it suggests that attention should be focused on stronger
enforcement mechanisms, with added emphasis on market surveillance,
perhaps accompanied by a streamlining or harmonisation of sanctions
for non-compliance; giving consideration to a "horizontal"
measure which would set out elements common to different product
sectors; greater use of digital technologies, particularly in
relation to compliance; the relationship between products and
connected services, such as installation and maintenance; placing
greater emphasis on the use of Regulations, rather than Directives;
and adopting a business-friendly approach to product rules. It
also comments that the EU needs to recognise that, whereas the
size of the single market used to mean that it could be assured
of the attractiveness of its regulatory model, the EU now needs
to promote greater international convergence in legislation and
technical standards.
9.12 The Commission concludes that the internal market
for products needs to continue to evolve, but that this should
be balanced by periods of regulatory stability. It says that it
will therefore focus its efforts in the short term on the consolidation
of legislation and the strengthening of enforcement mechanisms
without further burdening the industry, but it adds that it will
work on a proposal for harmonising economic sanctions and a common
framework for the marketing of industrial products.
The Government's view
9.13 In his Explanatory Memorandum of 12 February
2014, the Minister of State for Business and Energy (Michael Fallon)
says that, as the internal market for industrial products is an
area of EU competence, the majority of the Communication does
not raise subsidiarity concerns, but any subsequent legislative
proposals will be looked at closely from that perspective, particularly
if they sought to harmonise economic sanctions for non-compliance.
9.14 Subject to that proviso, the Minister welcomes
the document and also supports the Commission's objective of achieving
a simplified legislative framework for these products and the
need to consider the impact of regulation on the competitiveness
of EU business, which he says is consistent with the Government's
wider objectives for both the EU single market and regulatory
burdens on business. He also says that the Government:
· would need to understand more about what
the Commission is proposing in relation to the harmonisation of
economic sanctions before it can come to a firm position, but
it would not want to see detailed and prescriptive rules on domestic
legal remedies, regarding this as a matter for Member States,
and preferring to achieve a level playing field through improved
co-operation between them rather than the harmonisation of sanctions;
· can see value in a greater level of horizontal
(rather than sectoral) legislation, as this should bring some
benefits in terms of greater simplicity for businesses, particularly
those whose products need to comply with two or more different
Directives, but it would like to see further evidence that any
such proposal would add value, given the significant effort and
costs that would be involved;
· agrees that, whilst it would reduce the
flexibility to tailor legislation to UK circumstances, a move
towards Regulations rather than Directives should deliver greater
simplicity and consistency across Member States, and could also
reduce the risk of the European Court of Justice interpreting
and legislating in this area;
· supports moves towards the use of technology
in this field as having the potential to reduce the compliance
burden for businesses whilst making market surveillance more efficient
and effective;
· strongly supports the conclusion on international
standardization, as this could significantly reduce costs to UK
businesses wishing to export beyond the EU.
9.15 The Government also says that a policy discussion
on this document was on the agenda for the Competitiveness Council
on 20 February 2014, and is due to be considered by the European
Council on 14-15 March, with conclusions expected to be agreed
at the Competitiveness Council in May.
Conclusion
9.16 We have already drawn to the attention of
the House (and recommended for debate in European Committee) a
Commission Communication[45]
on EU industrial policy, and this document will be considered
alongside it at the European Council, and agreed at the Competitiveness
Council in May 2014, as part of an overall package of measures.
However, although the document is wide-ranging and deals with
an important area, we do not think it gives rise to issues which
require further consideration. Consequently, whilst we are drawing
it to the attention of the House, we are content to clear it.
43 (34341) 15168/12 + ADDs 1-8: see HC 86-xx (2012-13),
chapter 15 (21 November 2012). Back
44
This obliges Member States to notify the Commission and each other
of draft technical regulations concerning products. Back
45
(35749) 5489/14 + ADD 1: see HC 86-xxxiv (2013-14), chapter 1
(26 February 2014). Back
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