Business Law – Cassis de Dijon Assignment

Business Law – Cassis de Dijon Assignment Words: 1117

“Without the Cassis de Dijon decision, the EU internal market would never have become a reality”. Discuss this proposition. To fully understand and discuss the statement above, the two key things that need to be understood are what the Cassis de Dijon is and what the EU internal market is. The EU internal market comprises the territories of all EU Member States. The aim was, and is to create an area for the application of the 4 fundamental freedoms; the free movement of goods, persons, services, and capital.

The free movement of goods is a prerequisite for the proper functioning of the EU’s internal market. Significant relaxation was achieved by eliminating tariff barriers that were preventing the further development in various Member States. The Cassis de Dijon judgement is a famous example of a decision issued by the European Court of Justice that set out a new legal framework for the achievement of the internal market. It all started in Germany when a trader was refused permission to import a batch of liqueur into the country because the strength of alcohol was inadequate for that kind of liqueur.

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However, it admitted that certain obstacles in trade between EU member states were acceptable where they were justified by certain public policy needs, such as health, safety and defence of the consumer. Even today, different nation states continue to apply restrictions on the movement of merchandise. The European Court of Justice also decided in this case, that under certain specified conditions, member states should accept in their own markets, products approved for sale by other member states. This is known as the “mutual recognition principle. Under the mutual recognition principle now acknowledged by the European Union, an Italian liqueur, for example, can be imported into any EU country given it has been deemed acceptable for sale by other EU countries. The very fact that the liqueur was produced within the European Community grants it the capability to circulate and be sold freely within the European Community. I believe that there would be no EU internal market without the Cassis de Dijon decision as it has greatly affected policy on the free movement of goods across Europe.

In the past, international trading has had rules which restricted trade between the different countries. However, after the Cassis de Dijon decision, the entire concept of the internal market was changed. The existing “internal market” prior to the Cassis de Dijon and after the formation of the European Union was one of theory and not of practice. Even when united under common European law, nation states still had their own restrictions on trade. It was only when Germany refused permission for the liqueur to be imported that the European Community acknowledged the restrictions in their market.

At that point, member states had to ask themselves; is the current European market really an internal market? One of the key objectives of an internal market is to allow for the free movement of goods within the European Community, but if one country deemed the liqueur adequate for sale, why shouldn’t another? The case exposed the flaws and barriers of trade throughout Europe and sparked the realisation that the “internal market” needed to put into practice and not just theory. An important development occurred in 1986. It was when the EU member states signed the Single European Act (SEA).

A White Paper issued by the Commission in 1985 revealed that many barriers still existed to the achievement of the single internal market. They realised that if they want to achieve the full economic benefits of the single internal market and challenge world competition, they must make further progress. The result of this was a new treaty, the SEA. The main purpose of this was to eliminate the remaining barriers of the single internal market within the deadline of 31st December 1992 and achieve the internal market using the mutual recognition technique.

The concept of the internal market replaced the popular term ‘common market’. The key objective of the EU is the achievement of a customs union. This means abolishing all internal barriers to trade and establish a common external tariff throughout the European Community. As a result of the decision, the European Court of Justice called for the removal of tariff barriers and called for the free movement and circulation of trade. Within time, the internal market has proved to the beneficial to citizens and entrepreneurs alike and has resulted in a significant rise in mutual trade amongst the members of the European Community.

If the Cassis de Dijon decision did not occur, the progress of the EU internal market would not have been so fast. This is because it gave a new impetus to the harmonisation process, which led to the declaration by the Commission that it would concentrate on steps for the harmonisation of national laws which could still affect inter-state trade. The principle of freedom of movement of goods has been described as a fundamental freedom, the corner-stone of the Community. For most Member States the opportunity of access for their goods to a single market was the primary reason for membership.

The aim of the free movement was to create a single market, free of all internal restrictions on trade, based on a system of free competition. The free play of market forces within that larger market would increase economic efficiency, widen consumer choice, and enhance the competitiveness of the Community in world markets. I believe that there is further evidence which shows that the Cassis De Dijon decision was essential in building the EU internal market. The European Community began in the Trade Union stage, with the Single European Market stage coming next in 1986.

With the Cassis de Dijon decision, there was advancement to the Political and Economic Union stage, where the European Community member nations reached agreement and signed the Maastricht Treaty in February 1992. The Maastricht Agreement achieves a political union as it commits member countries to work towards a common foreign policy and toward a common defence. It also altered the voting policy and took major steps toward establishing economic union. It establishes a European Central Bank and a European System of Central Banks to manage monetary policy and maintain price stability.

Word Count: 1,114 Bibliography Cairns, W. (2006) An Introduction to International Business Law, 3rd edition, Manchester. Hotchkiss, C. (1994) International Law for Business, Singapore, McGraw-Hill. Steiner, J. and Woods, L. (2000) Textbook on EU Law, 7th edition, London, Blackstone Press. Vincenzi, C. (1996) Law of the European Community, London, Pitman Publishing. Wallace, H. and Wallace, W. (1996) Policy Making in the European Union, Oxford, Oxford University Press.

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