The European Unions Formation - Report Example

Running Head: EUROPEAN LAW REPORT European Law Report [The of the will appear here] [The of the id will appear here] [The of the course will appear here] [The name of the course number will appear here] Introduction The European Union was formed for the express purpose of consolidating the countries falling within the union and allowing the politics and economies of all the members to benefit from each other. The free movement of goods was one of the basic provisions of the law developed by EU. Under this law, the countries are prohibited from putting any trade quotas or any kinds of restrictions on the trade from member countries. This paper is an attempt to evaluate the Article 34 of TFEU and the limitations posed by this article. This paper will also discuss the Keck Approach and the issues that still pertain in this particular law. Article 34 TFEU Article 34 of the TFEU states that ‘Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between member states’ (Weatherill, 2012, 279). Thus, Article 34 of the TFEU states that countries included in the member states of the European Union are prohibited from putting any restrictions on imports of goods from other member states. Article 35 of the TFEU places similar restriction on member states in terms of the exports. The purpose of developing this law was to ensure the success of a single market. However, in certain cases, this law can be overruled but justification for these needs to be provided and approved beforehand. The scope of Article 34 includes restricting members countries from placing import quotas and bans along with restricting states from favoring their domestic trade by investing in campaigns that compel consumers to ‘buy national’ (Wolf and Stanely, 2012). The Dassonville Case The Dassonville Case is an important case in conjunction with Article 34 of TFEU. It redefined the law of importing and selling goods within the member states of the EU. Dassonville was employed in the import export business whereby he bought Scotch whiskey at cheaper prices from France and sold it at higher rates in Belgium. He was able to do this because whiskey was priced lower in France as compared to Belgium. He was because the demand of whiskey was higher in Belgium as compared to France and whiskey producers in order to let the French acquire the taste of whiskey, sold it at cheaper prices. Their strategy was to increase price later on as the French got used to the taste of whiskey. Dassonville took advantage of the situation. However, he was restricted in doing so because a law in Belgium required that the goods been sold in the country have a certificate attached to them naming the ‘designation of origin’, which in this case of Scotland. The path that the whiskey travelled from the origin to the final place was from Scotland (British customs) to France and then to Belgium. When the whiskey reached France, the British customs removed the certificate from the bottles. Thus the bottles reaching Dassonville had no certificate on them and therefore he could not legally sell it in Belgium without the certificate. Here Dassonville raised the issue that the law was MEQR (Chalmers, Davies and Monti, 2010). MEQR was included in the Article 34 refers to measures having equivalent effect. It prohibits member states from enforcing trading rules ‘which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade’ (Weatherill, 2012, 281). This statement was later known as the Dassonville Formula. The Dassonville Formula later led to the development of the Cassis De Dijon. While the Dassionville Formula prevents member states to discriminate against imported goods due to national measures, the Cassis De Dijon is more concerned with dealing with two different laws- one in the importing country and the other in the manufacturing country. Cassis De Dijon ensures that the laws of one state be binding on the laws of other state to a certain extent. This was done in order to allow for free movement of goods without any hindrance from national laws and allow for common standard in all member states. The rule of reason was also introduced that was development as a result of criticism towards the Dassonville Formula. This rule allowed exceptions to Article 34 in certain conditions. This condition included protection of public health, consumer safety and fairness of commercial transactions. Limitations of the Dassonville Formula The Dassonville Formula and the subsequent Cassis De Dijon posed a set of problems of the member states of the EU. The biggest criticism against the formula was that it was too wide and did not actually present a clear picture of what should be covered in this particular law. One of the most discussed and most widely felt was the issue of reverse discrimination. This implies that Article 34 favors the importers as opposed to the nationals. In most cases that were filed in this respect, it was found that Article 34 was disfavoring local trade. This was because local traders had to comply with the standards set forth by the state but the importers were allowed leverage if their state did not bind them to such laws. One example of this was the Oebel case where Belgium bakers were not allowed to produce bakery products during the night. Here bakers in the neighboring states took advantage of the law by selling fresh bakery products during the early morning time as Belgium bakers had no fresh products to showcase during that time. Another limitation of the Dassonville formula was that it was greatly disturbing national regulation. A state had imposed certain regulations in the market due to the presence of certain conditions. Thus the laws in each state were a reaction to the customs and practices in the state. The Dassonville formula rejected this belief. It took the power out of the hands of the state and gave it to the importers who often used Article 34 for their own advantage. Thus this Article 34 was destructing national laws and posed a threat of the smooth functioning of trade within the country (Colston and Galloway, 2010). Another issue that occurred when the Dassonville formula was applied in real life setting was the case of price fixing cases. In certain countries, there is a limit on the maximum and minimum price of certain products. When states prevent sellers from selling their wares above a certain price limit they may be discriminating against the importers since they have to bear transportation costs that are not borne by the locals. In this case, an example of Tasca can be taken who was implicated for selling sugar at a price above the maximum set limit. Tasca took respite from Artile 34. However the court ruled that states can only be permitted to increased maximum price limit if it endangers the business of importers which was not the case with Tasca. The Keck Approach In view of the above limitation of the Dassonville formula, a need was felt for improvement in Article 34 of TFEU. This improvement was proposed by Keck. Keck is a major case in the history of EU law. While Article 34 places restrictions on restricting any kinds of imports between member states, Keck case introduced a new Article, Article 36 that allowed for certain concessions. Keck approach was developed as a result of a Swedish law that prohibited alcohol manufactures to market their products commercially if they had an alcohol content of more than 2.5% in their drinks. Gourmet International Products filed that this law was against the principles of Article 34 of TFEU (Kaczorowska 2012). In this case, however, the ECJ held that Article 34 does have its limitations. This is in case of laws that impact public health and consumers. This later led to the Keck Approach that was incorporated as Article 36 TFEU. Keck Approach made a distinction between selling arrangements and requirements to be met. The Keck Approach was important as it prevented importers from taking advantage over the local competition through Article 34. Issues remaining including proposals Even though the Keck Approach allowed for an improvement in the Article 34 of TFEU, it was still criticized on certain points. The main criticism against the approach was that it did not take the same approach towards other laws pertaining to free movement of goods and in this manner, it was discriminatory. Thus overall the Keck Approach is not consistent in laws pertaining to the free movement of goods and only focuses on one aspect, which are quantitative measures (Craig and Burca 2011). Another criticism aimed at the Keck Approach is that it does not take into consideration the real purpose of the free movement of goods. The provision of free movement of goods was to facilitate trade between member states. However, the Keck Approach limits it to gaining proper access to national market rather than focusing on the creation of a single market (Craig and Burca 2011). Conclusion The main issue with regard to Article 34 is that the scope of this law is too wide. The TFEU is unable to determine the extent of power of Article 34. It results in negative harmonization as it disrupts national legislation which may have been enacted in a state for a good reason; however the ECJ revokes it in the favor of a single market; which may in fact be killing local competition. References Chalmers, D., Davies, G. and Monti, G. 2010. European Union Law: Cases and Materials, London: Cambridge University Press Colston, C. and Galloway, J. 2010. Modern Intellectual Property Law, New York: Taylor & Francis Craig, P. and Burca, G. 2011. The Evolution of Eu Law, UK: Oxford University Press Kaczorowska, A. 2012. European Union Law, New York: Routledge Weatherill, S. 2012. Cases and Materials on EU Law, London: Oxford University Press Wolf, S. and Stanley, N. 2010. Wolf and Stanley on Environmental Law, Oxon: Taylor & Francis Read More