The EU Market – How Does it Work?
When considered as a single economy, Europe is the world's largest. It includes some of the world’s most dynamic and advanced economies, so it offers good opportunities for business in Botswana.
In the European Union (EU) single market people, goods, services, and money can move around the EU as freely as within a single country. Mutual recognition plays a central role in getting rid of barriers to trade. In brief, if you send your product to ONE EU country, your product can easily travel and be sold around the other 27 EU countries. The countries on the EU are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom. This means that when exporting to the EU, you can benefit from a market of 28 countries with around 500 million consumers.
In the EU single market there is free movement of goods, allowing goods to be transported and sold anywhere in the EU. To a certain extent, complex and varied national laws have been replaced by a single set of European rules, cutting down on costs and inconvenience for businesses wanting to trade in other EU countries.
The free movement of goods is one of the cornerstones of the internal market. It offers businesses the advantage of larger markets and European citizens a wider choice at lower prices in an open and competitive area. Free movement applies under the same conditions for all goods circulating within the EU, including those from Botswana, with the exception of those posing risks to consumers, public health or the environment. The ban on measures restricting imports and exports between EU countries and the principle of mutual recognition ensure compliance under the monitoring of the Commission.
Since 1993, controls on the movement of goods within the EU internal market have been abolished and the EU is now a single territory without internal frontiers. The abolition of customs tariffs promotes trade and provides Botswana business with a huge market.
The harmonisation of the existing technical standards in the EU countries is essential to eliminate a large number of obstacles to trade in goods. In the past, each EU country imposed different technical specifications for all industrial products. However, differences between national technical regulations inevitably impede the free movement of goods within the single market.
Technical harmonisation at EU level therefore guarantees both genuine free movement of industrial products and a high level of safety for consumers and users of these products.
The freedom to provide services and freedom of establishment are essential to the smooth operation of the internal market. Economic operators can pursue a stable, continuous activity in one or more EU countries and/or offer temporary services in another EU country without having to be established there. The EU is working towards providing frameworks for these two principles to guarantee the smooth functioning of the single market for services, and especially cross-border services. Since 2006, the EU has achieved significant progress in the area of certain services.
The integration of financial markets means that capital can be allocated more efficiently and makes for better long term economic performance. The EU has established a legislative framework geared to strengthening the financial services sector, in particular in order to improve the performance of financial operators and boost liquidity, competition and financial stability.
EU policy on financial services shares some concerns with that on the free movement of capital when it comes to facilitating, and improving the security of, financial activity. Such issues stem in particular from the cross border character of this activity, but also from the massive growth in services based on new technologies.
Financial services policy covers three main sectors: the banking system, insurance and securities. Apart from laying down rules for operators and investors (banks, insurance and securities), the EU also intends to give greater protection to consumers in specific areas such as retail financial services.