Expert View

Here’s why the single market is hard to pick apart

by Martin Donnelly | 22.01.2018

Martin Donnelly was Permanent Secretary for the Department of International Trade until last year.

Can the UK find a coherent way to have its regulatory cake and eat it – to be outside the European Union while choosing to follow the EU standards needed for access to the internal market?

Suppose that on March 30 next year the UK is producing a pharmaceutical product, or a legal service, or transporting freight across the EU, while meeting all the EU regulatory standards in the relevant sectors. Until that date, there is a legal framework which determines what those standards are, and therefore a chance of legal redress if the goods or services are subsequently found not to meet these standards. This is through national courts in the first instance, applying relevant EU law, and with the chance of appeal to the European Court of Justice (ECJ) if needed to clarify what the law actually means in a specific case.

So if the UK is no longer prepared to accept ECJ jurisdiction, it is not in a position to provide the same clarity of legal redress to businesses or consumers in the rest of Europe. It could unilaterally offer to do so. But that offer could be withdrawn at any time so there would be less legal certainty about how to gain redress.

If providing the same level of redress and court access was made a condition of the market access, the UK would have to agree to follow all the most recent ECJ jurisprudence, to ensure that its legal framework incorporated developments in EU law as soon as they were published, with immediate judicial effect.

Over time the underlying EU regulatory framework for specific products will change as new product definitions are agreed. Environmental standards, healthcare safety regulations and data protection issues are all relevant to deciding whether a product or service is approved for the single market.

Would the UK be prepared to unilaterally promise to meet immediately all these changing standards for a particular sector? If not, then regulatory alignment would be lost.

It gets worse. Those producing the goods or services would at the point of UK exit still be entitled to EU standards of health and safety, of maternity, sickness and holiday pay, of clarity about the role of temporary or posted workers, and so forth. If these standards were not maintained,  for example on drivers’ permitted hours, then others would certainly claim that the UK was seeking an unfair trading advantage within the single market.

A similar problem arises with customs duties. If the UK were outside the EU’s customs union and chose to reduce tariffs on some imported pharmaceutical materials which were then incorporated into products sold across the EU, it would have acquired a cost advantage which would again be seen elsewhere as inconsistent with single market access. Would the UK promise not to change tariffs on relevant products? Or be prepared to lose market access if it did so?

The single market is a coherent tapestry of economic and social regulation. Pulling out one strand is very hard to do without changing the whole picture. And so far the EU has been consistent in its commitment to keep the single market as it is, with a single set of rules for all.

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    Edited by Hugo Dixon

    Tags: , Categories: Economy

    12 Responses to “Here’s why the single market is hard to pick apart”

    • Or, to put it in one sentence: the only way to trade with the Single Market is to follow the rules of the Single Market, and if you’re doing that why give up a say in setting those rules?

    • Dear Hugo,

      The articles written by the InFacts team and guest writers are all so logical and sensible.

      However, are they being read, absorbed and understood by at least some Westminster MP’s (with the known exceptions, of course)?

      Can you or any of the other writers confirm that some or a few of your subscribers are actually MP’s?

      In other words, there is an interest in what you are writing at Westminster?


    • NJ raises an issue that has been worrying me for many months. I fear that InFacts is read only by those who are already ‘converted’. We need to reach people beyond the circle of readers who already support remaining in the EU because we are aware of the overriding benefits of EU membership despite its many failings, which can be remedied but only from the inside. It would be really helpful if InFacts could produce a factual crib sheet that could be used to answer the objections of the undecided or wavering members of the public as well as MPs.

    • I believe many of us start with an instinct or gut feeling about the EU. Then we look for evidence to support our inclinations. We must also be willing to look at evidence that opposes, and I believe I have. Brexiters hang their convictions on assertions and generalisations. This article explains with incontrovertible clarity the philosophy and fairness behind the Single Market.
      I beg those who believe they are being patriotic by wanting to leave to read this carefully. You will have been told that the ECJ has dominance over the UK; we need to set ourselves free. When you read and understand this article surely it is obvious the ECJ is just a sort of referee for the level playing field of the SM?

    • I’m afraid facts are of no interest to hardcore Brexiters. They use faith in place of rational argument. I believe the Brexit car-crash must happen, in some form, to shake the zealots awake. Let’s hope the damage can be contained.

    • I have also been concerned for some time as to who is actually reading INFACTS. The brilliant and informative articles are obviously not being read by those responsible in any way for the Brexit process. At one point I thought the need was for a “EU for Dummies” type of campaign but the information that would be contained in such a publication is already available on the net. Nonetheless every day newspapers and the BBC are allowed to refer- without correction- to the ” unelected bureaucrats in Brussels ” or to the ” corruption in the EU and its audit procedures ” and so it goes on.
      The result is that public opinion in the UK is no better informed now than at the time of the referendum.
      The danger of the car crash scenario is that one cannot predict the results. Yes, the shock could be salutary; the UK would finally understand ; or the level of hate and agression towards the EU would get out of control ( it already is in some quarters )

    • if a non EU person sells a widget to an EU corporate client which is then found to be below the client-set specification, there are plenty of routes of redress, down to never doing business with them again.

      Both parties need not be subject to the ECJ for that to happen. So it is not true to say that one needs be subjecy to the ECJ to **access** the Single Market. Being **in** the SM is clearly another kettle of fish.

    • How appalling that this govt “servant” was in the Trade dept. Completely useless, people like this man are wanting to subvert the will of the people and stop Brexit. Well you and Blair and all the other traitors won’t, so suck it up and do us a favour, go and hide in a hole

    • So if I understand this properly it is impossible to export to the EU unless the exporting country meets all of the workers rights and health and safety standards are exactly the same as those in the EU. The Chinese might be quite surprised at this. Does the rest of the world submit to this demand? Perhaps someone could enlighten me.

    • It is a great concern that many of the people who felt Leave was a good idea seem to have a semi detached view about Reality & practicality in Britain today . It is hard , if not impossible to see how any post Brexit deal can be as good as the one we already enjoy. As has already been said ,Why would the EU give a post Brexit Britain as good a deal as a fully paid up member? Well accept that is isn’t, even in this post-truth era ( in some circles). In the negotiations so far, which have taken 10 months, all that has been ‘agreed’ is that Britain is going to have to pay circa £40 billion just to separate, this payment is not linked to a future trade deal, which could be many years away.In the meantime it is not clear how a borderless Ireland can possible exist if Britain is not committed to the Single Market. The future plethora of Trade Deals waiting in the wings is simply not credible as there has been a palpable lack of any progress on any one of them, and deals with the US look further away than ever with a Trump Whitehouse. Of course it seems non sensicle to many of us to turn our backs on our nearest neighbours with whom we have far more in common than we have difference’s. Many have forgotten how disfunctional Britain was in the 1970’s before the stability and pragmatism of the EEC (European Economic Community) enabled Britain to recover with secure markets as the dream of trade with former Colonial partners never really worked anyway. Finally, there are so many undesirable consequences of the vote to Leave the EU, and they are likely to pale into insignificance compared to the post-Brexit debacle. The current crop of Politicians cannot be allowed to be the automitans to exercise Brexit at All or Any Cost without the Checks & Balances a mature Democracy deserves and demands, so once the Government has done it’s best to get a Good Deal, Parliament should vote to Accept it if they Actually believe it is the Best way forward or Reject it if they feel the price is too high for what Britain stands to gain. This would be put to the people in a Referendum to Vote for Stability of retained EU membership or to go with all of the uncertainties of the Deal to Leave, accepting that many businesses will struggle to exporthe or recruit , our Health & Social care services will be fatally weakened , our prospects & those of our Children will be impaired for their lifetime’s, we cannot allow any of this to happen in our names.

    • In response to Graham Beck’s reasonable inquiry: the writer is saying that to enjoy the benefits of being part of the single market (benefits which China does not enjoy), all countries submit to a regulatory framework that allows a level playing field for all member states. This allows for fair competition between companies across the EU. in fact, China does have to submit to trading standards in importing into the EU, but that’s a different story.

      I concur with those writers who wonder who reads InFacts. Clearly, ‘Andrew’ is one, and he is clearly a Brexit moron. So, perhaps they do read it, if ‘read’ is something they can do.