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Trade barriers in the Single Market

Study suggest companies face discriminatory measures in Single Market

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In an EU-wide survey of the Centre for European Policy (cep) commissioned by METRO AG  59% of companies feel affected by discriminatory restrictions to their business in the Single Market.  

For the study, 53 questionnaires from 22 countries were analysed; however, from 12 Member States, only one company participated and there were no participants from six Member States. Due to the small sample size, the results are not representative. Nevertheless, they can serve as approximation. 

According to the study there are indications that companies are significantly more impacted by trade barriers in the Visegrád countries -Poland, Czech Republic, Slovakia and Hungary. Another key finding of the study is that these barriers imposed by national requirements do not particularly target specific sectors such as the food industry.

The study, conducted by Dr. Matthias Kullas and Till Brombach, highlights that the most substantial obstacles to trade identified are “other labelling requirements”, “minimum sale quotas for domestic products” and “obligations to promote domestic products”. While labelling requirements have decreased in the last years, the quotas and promotion of domestic products have significantly increased since 2012.

More barriers lead to less trade

These barriers lead to less trade within the Single Market: More than 85% of the companies participating in the CEP study survey declared that they would engage in more trade activities if barriers stemming from minimum sales quotas for domestic products and requirements to promote local and national products would be lifted.

Trade barriers, such as obligatory contribution to a marketing fund and rules on product composition of EU goods, are especially impacting foreign companies, putting them at a disadvantage vis-à-vis domestic business.

37% of foreign companies consider themselves to be more affected by such barriers than domestic companies and, thus, being discriminated. 

Other labelling requirements (labelling requirements except prohibition to exchange original labels by covering or removing them), minimum sales quotas for domestic products and notification requirements for the import of goods “have a comparatively high adverse effect on trade”

The study further underlines that foreign companies are adversely affected by tax penalties and controls when operating, opening or expanding subsidiaries.

Approximately one quarter of companies point out discriminatory measures disfavouring subsidiaries, while 33% of the companies share the view that “discriminatory controls by public authorities have increased the most across the EU since 2012.

You can download the study here

 

Clara Salarich-Ortega

Information about the author

Clara Salarich-Ortega works as Manager EU Affairs in the Representative Office of METRO AG in Brussels clara.salarich@metro.de