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WK 3226/2019 INIT
LIMITE
COMPET
MI
WORKING PAPER
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WORKING DOCUMENT
From:
BusinessEurope
To:
Working Party on Competitiveness and Growth (Internal Market)
Subject:
Priorities for the Single Market beyond 2019
WK 3226/2019 INIT
ECOMP.3.A MS/ech
LIMITE
EN
STRATEGY PAPER
20 November 2018
Priorities for the Single Market beyond 2019
With this strategy paper, BUSINESSEUROPE sets out its general priorities for the future of the
Single Market policy after the 2019 European elections. It highlights the importance of
maintaining trust in and responsibility for the Single Market through reinforced focus on its end
users – businesses and citizens – so that political and social support for market integration is
regained. It is crucial that there is understanding why the Single Market is the strongest tool to
reap benefits of globalisation and deal with the primary chal enges people of Europe face, such
as climate change, migration, global trade and technological rivalry tensions, and Brexit along
with a generally unstable global geo-political landscape. No EU Member State is capable of
addressing it all alone. Freedoms of movement of capital, goods, services, people and data in
the Single Market can give huge economic power to the EU, its members individually and as a
whole, in this regard. That economic power generated from more effective distribution of
resources and fair competition would enable faster economic and social convergence that is so
needed in the EU. A cross-cutting “reflex” to safeguard and deepen the Single Market in different
policy areas on a daily basis must be established as top political priority, so that the EU remains
the best place for investment and achieves an effective and fair Single Market which brings
tangible benefits to all.
BUSINESSEUROPE intends to react to the Commission’s report on the state of play of the
Single Market to the December European Council of 2018 and the debate by Heads of State
and Government by way of updating or supplementing this strategy paper.
Key messages
➢
Further opening and integration of the markets of goods and services, including
logistics and network services, is needed in order to unleash the full economic
potential of the EU and establish a solid basis for global competition in the long
run.
➢
Digitalisation is crucial for European competitiveness, so the framework
conducive to the roll-out of digital technologies and fair rules on access to data,
free flow of data, and liability should be achieved through a holistic policy
approach.
➢
Infrastructure investment conducive regulatory and financial framework must be
ensured so that physical and digital infrastructures are significantly improved and
interoperable.
➢
Single Market legislation should consistently reflect the market integration
ambition through reduction of barriers and be future-proof: it should allow for
innovation, flexibility for business to respond to fast-changing environment,
enable new business models and be technology-neutral.
➢
Better regulation principles and their practical implementation should remain a
key priority so that the Single Market is the best place to do business and work.
➢
The Single Market governance infrastructure should be vastly reinforced at EU
and national level in order to strengthen timely, transparent and efficient
implementation and enforcement of the Single Market rules.
General approach to the future agenda.
•
The Single Market should be brought back to the top of the political agenda as an
overarching instrument and “reflex” in the EU policy making. Reconciliation of social or
consumer or privacy protection interests with the freedoms of the Single Market should not
result in less choice, higher costs and slower convergence for Europeans. Europe needs a
fair level-playing field with the unquestioned freedoms of movement of people, capital,
goods, services and data.
• It is crucial to ensure
innovation-friendly and future-proof Single Market legislation
combined with an
efficient user-friendly digitised administration. Policies and regulation
should be open to new business models, technology-neutral and not unnecessarily
hampered by contradicting decisions or lack of coordination in other policy areas. They
should take into account global competition pressures, available infrastructure, existing
legal framework, technological and production cycles as well as the technological advances
to date. The Single Market rules should be flexible enough to allow for innovation and so
ensure that the EU becomes a leading ecosystem for the development of innovative
products and services and remains the best place for investment.
•
The EU must take a holistic policy approach and the Single Market should not be
artificially divided into “digital” and “offline”. The policy choices based on this kind of
separation have in the past led to either partial solutions or unintended consequences in
the legislative process and for the application in daily business, ignoring the fact that a digital
dimension becomes a natural “ingredient” of goods and services.
•
Further opening and integration of the markets in the EU need to be based on optimally
harmonized rules so that citizens and businesses can easily see they would be treated
equal y across the EU and can benefit from greater competition across EU countries. Where
full harmonisation is not necessary, the mutual recognition principle should be respected
and solutions for its practical enforcement found, including in the area of services. This
approach should also work to ensure smooth pan-European trade flows with our closest
European trading partners.
• The Commission should
reinforce a fact-based dialogue on the Single Market with
business organisations and the society at large, using its better regulation agenda and
outreach tools like the Single Market Forum.
Simplification of rules, reduction of
regulatory and administrative burden and consistent application of both ex-ante and
ex-post assessments of policy choices should remain centre-stage in order to ensure
that the EU Single Market is the best place to do business and work.
• This
approach should be reflected in the institutional setup and procedures of the
Commission first of all, as well as the Council and the Parliament. The Single Market should
not be a business of one directorate-general or one committee. It should be a central policy
principle of all the services of the EU institutions as a “Single Market proofing net”,
functioning in a clear and non-bureaucratic way.
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I.
Regulatory and administrative barriers: setting improved policies to reduce
regulatory and administrative barriers
Specific points for the future agenda on services, data and goods.
•
The Single Market for services should be a key priority for the next Commission, as
the agenda on this policy area has not progressed much recently with the Commission
focusing on administrative rather than regulatory barriers.
• However, there is not enough recent data – of a legal, as well as macro, micro-economic
and sectoral nature - to assess the regulatory barriers that remain, their economic
significance, and to come up with credible evidence-based proposals. There is a need for
comprehensive data and assessment updates for the services sector on the basis of
market analyses. Such assessment is essential to establish links between services policy,
applicable law, consumer legislation, public procurement, company law, social policies and
digitisation. Therefore, the Commission should conduct such evidence renewal taking a
broad perspective not confined to a specific piece of legislation (such as the Services
Directive) or policy area in order to address barriers for service providers across the board.
• Seamless functioning of manufacturing value added chains calls for
effective and barrier-
free business services and logistics, including significant improvements in physical
and digital infrastructures and their interoperability. Further integration of network
industries in general remains very important.
• The manufacturing sector needs to be seen inseparably from services, as the one using
them throughout the value chain or providing services itself. Delocalisation of services from
Europe is also taking place and creating new high vulnerabilities to the EU manufacturing
sector. However, the European manufacturing sector has the relationships and expertise to
reverse this trend with improved data availability, free cross-border movement of data and
public investment in artificial intelligence R&D.
•
Ensuring the free flow of data and a smooth roll-out of technologies can only
effectively take place based on a wide deployment of 5G. Harmonised and consistent
policies should be a priority in the Single Market. It is necessary to ensure a competitive
spectrum policy and to build on the framework established by the Free Flow of Data
Regulation and remove all obstacles to data movement, ensuring that no additional
restrictions are created at national or EU level.
• Liability, data access and other issues related to the
evolution of the Artificial Intelligence,
automation, and other emerging technologies
need to be carefully addressed by first
comprehensively checking how the present regulatory framework meets the needs of
citizens and businesses.
Regulation is only needed where there is a market failure. Any
other approach risks undermining innovation for no reason or benefit.
•
The New Legislative Framework (NLF) for product legislation should be
strengthened. The process of designing the rules, if they are necessary, needs to always
ensure
consistency with the New Legislative Framework (NLF), and compliance
schemes should be flexible enough to allow for innovation and change. The
integration of digital solutions into products to enhance the quality of goods and services is
very fast. There should always be a preference for self-certification of products by
manufacturer without third party involvement to meet the fast-changing environment so that
the user is confident in getting up-to-date, safe and cyber-secure products.
• Industry needs to be given its role in standardisation back and the presumption of conformity
coming with the application of harmonized standards must be restored. Standardisation is
an industry-driven process and its success rests on the market relevance. Over the last
years, business community has been observing the change of the way in which the New
Approach policy for products functions. The industry is forced to follow development of
harmonised standards mainly in response to legislative or political requirements, which is
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de facto an “extension of legislation”. As a result, it has become less attractive for
companies to engage in the drafting and usage of harmonised standards as they lose
market relevance, which in turn reduces regulatory homogeneity in the Single Market.
Instead,
a balance should be restored between the role harmonised standards
essentially play to meet market needs in developing state-of-the-art technical
solutions and their role for better compliance with harmonised EU regulations.
• The Single Market should be an effective tool for a genuine European labour market based
on free movement of people. It should
enable sharing skills and talents as well as
reduction of the skills mismatch, and make Europe attractive for learning and working.
• The increasing use of
‘strategic’ public procurement in order to accommodate
inclusive social, innovation and environmental public policy goals should not add
unjustified barriers to participate in tenders, for example by adding unwarranted
complexity with unrelated societal goals. There must always be a direct link with the subject-
matter of the contract in order not to dilute the main objective of the public purchase.
Simplification and proper implementation of public tendering procedures is a key element
to the Single Market as public procurement is a large part of GDP, accounting for 14%. In
view of the steady decline of the number of bidders per tender and in order to encourage
cross-border procurement, emphasis should be placed on making public tenders more
transparent and attractive for private bidders. Professionalisation of public buyers is key in
relation to “strategic” public procurement. Misuse of in-house exemptions must be
prevented, and simplification with more legal certainty are particularly important in this
regard.
•
Administrative simplification and digitalisation are in general necessary for cross-
border business in Europe and facilitation of compliance. There is a need for solutions that
help businesses prove their eligibility to operate throughout the EU, e.g. provide proof of
their legal and financial credibility and a guarantee of market access. Digitalisation and
mutual recognition of procedures and documents should make compliance with regulations
and market access cheaper and simpler. Digitalisation should also facilitate compliance for
companies by means of efficient and user-friendly digitalised administrations, and through
improved communication between national administrations in the EU which digital allows
for.
II.
Enforcement/implementation barriers: how the Commission and the Member
States can better fulfil their obligations
• Removal of regulatory barriers and efforts to address unfair competition are often hampered
by the prejudiced political debate about levels of harmonisation and mutual recognition or
country of origin. To neutralize sensitivities, notably in the non-harmonised sector, the
Commission could provide
guidance to Member States on equivalence of requirements and compatibility of national requirements with the Treaty. It could also come up with, for
example, a clear common understanding of what “social dumping” real y means in order to
allow for differentiation between non-compliant rogue players in the market and genuine
legitimate competition.
•
The Single Market governance infrastructure should be vastly reinforced to ensure
good monitoring mechanisms and detect bad transposition of the Single Market legislation
or bad implementation/application. Transparency, an easily accessible and user-friendly
explanation of regulations affecting the Single Market, and effective complaint handling
should be the priority objectives in governance terms. Much could be achieved within the
4
framework we already have if rules were better implemented and enforced through existing
but streamlined cooperation tools.
•
A strong safety net to assess and/or prevent over-implementation (gold-plating) is
needed to detect bad transposition or misuse of the Single Market acquis for the objectives
different than those of the acquis in question. According to various sources, the flow of new
national regulations (also
unrelated to the direct EU acquis transposition) is increasing for
various reasons, be it digitalisation chal enges or protectionist tendencies. Growing
regulatory complexity is chal enging European businesses, especially small and medium-
sized enterprises (SMEs), and makes it much more difficult to expand their activities
throughout the Single Market. Only measures to increase
transparency of transposition and strong
preventive or at least detecting measures with participation of business
organisations can address this development. Ex-ante evaluation at EU and national level
must become the norm in developing and transposing EU laws as an important channel for
insight and feedback. This would lead to better shaping of, and performance of, European
rules and regulations that impact the Single Market.
•
Inventory of notification requirements for Member States under the EU Single Market
acquis and their actual impact on regulatory environment in the Single Market should be
carried out and access to such notifications made by Member States through one
information access point, such as Single Digital Gateway, ensured.
Duty to explain and
justify the notified measures should be reinforced and effectiveness of notification
obligations on Member States should be revisited together with stakeholders regularly.
• To final y streamline the information on rules and procedures for doing business in the
Single Market, the new Commission could promote
establishment of one national
“Single Market access point” in each Member State. It should build on the various existing
points of single contact under the Single Market acquis. Such access points must ensure
comprehensive information availability and e-procedures, be it services, public procurement
or taxation etc. and regardless of whether a national or foreign business seeks information
or procedure completion.
•
Effective and efficient market surveillance of products and substances marketed in
the EU, including those sold through digital means, should be established through a
mix of reinforced regulatory measures and a dedicated and well-coordinated enforcement
network across the EU Member States. Market surveil ance of products sold online from
third countries should also be addressed at WTO level and in bilateral trade agreements or
other instruments between the EU and those countries. It is a key priority to keep the
necessary level-playing field and foster competitiveness of European companies. Capacity
of the public sector to adapt to digitalisation of the product markets (digital channels of sales,
IoT etc., and market surveil ance system in this regard) must be significantly reinforced.
•
A complaint system that addresses all the issues businesses face, be it harmonized
or non-harmonized area and regulation or its interpretation matter, is necessary. A strong
Commission’s role, power and ambition on enforcement are needed, as wel as systemic
follow-up on non-legislative initiatives, such as the SOLVIT Action Plan.
• We need
the Commission resources clearly focused to service and coordinate
implementation and enforcement networks,
such as the Internal Market Information
System, compliance network of market surveil ance authorities or SOLVIT. Bringing about
a common commitment by Member States to allocate sufficient resources at national
level in support of these networks should be a priority. As example, if conformity
assessment and market surveil ance network is established but weak and uneven, it leaves
the Single Market “unattended for daily hygiene” which creates unfair competition and both
heterogeneity and trust issues among public administrations, businesses and consumers.
* * *
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