The Evolution of Rules for a Single Market

The principle of mutual recognition has been derived from Article 30 of the Treaty of Rome, and is claimed to be a practical example of subsidiarity. Mutual recognition, however, whilst striking down trade barriers does not create a Single Market for it results in product characteristics being determined by location of production. Furthermore, the Article 30 freedoms, embraced in the principle of mutual recognition, are not fully elaborated. Subsidiarity is inherently unsuited to the determination of product characteristics, but could usefully be applied to determine production [process] characteristics. Mutual recognition, in fact, has been used by the Commission as a form of deregulation, but by linking the concepts of mutual recognition and subsidiarity, the Commission is liable to bring the latter into disrepute. INTRODUCTION All economic activity takes place within institutional and legal constraints which may in themselves hinder or facilitate commercial operations and in particular act as non-tariff barriers to trade. This paper focuses on legislation relating to food, and the European Union’s [EU] quest for a Single Market. Long before ‘subsidiarity’ became a household word, the EU had abandoned its ambitious programme of food law harmonisation, embracing all facets of food law, and instead had focused on a more limited rage of harmonisation measures establishing minimum standards within the EU, but focusing on ‘mutual recognition’ as a means of breaking down residual trade barriers. However mutual recognition does not create a Single Market, and this paper explores some of the economic consequences that are likely to flow from the EU’s stance. It considers the potential impact of mutual recognition on the food industries and consumers. Furthermore, although a considerable body of cases has been considered by the European Court, some confusion still remains regarding the precise requirements that have to be met if a product is to enjoy the benefits of mutual recognition within the EU. This centres on the question whether a product has to be both manufactured and marketed in a Member State, and the implications this has for products manufactured in Third Countries.2 1. This paper draws on the author’s earlier writings, notably Swinbank [1993 and 1994b].