Question 1

The four commonly recognised stages in economic integration are: Free Trade Area; Customs Union; Common Market; Economic Union.

Define each of these terms, and Identify which stage has been reached by the EU.

Answer guidance

This is a relatively simple question looking at the basic understanding of economic integration by the establishment of various stages of the free movement of goods.

A free trade area involves the removal of customs duties between member states, however the members of a free trade area decide themselves their external policies and any duties payable by third party countries wishing to export goods into those countries. Different states may therefore have different external tariffs so exporters to the free trade area (FTA) may target their imports on the country with lower import duties or tariffs. Any goods entering will compete with internal goods of the free trade area therefore certification of origin and a further import duty may be required both of which are difficult and expensive to administer.

A customs union creates a common external tariff, presenting a common position to the outside world. The same duties are imposed on goods entering the customs union regardless of where they are imported from. Once imported, the goods circulate freely as union goods throughout the union.

A common market adds to the above definitions by providing policies and legal regimes for the free movement of the factors of production (goods, persons, and capital) and a competition policy.

An economic union would be all of the above plus the harmonization or unification of economic, monetary, and fiscal policies including the creation of a common currency controlled by a central authority. An economic union is, in fact, a rather rare development with few historical examples.

Which Stage has the EU Reached?

Whilst its goals are clear, as outlined above, just how far has the EU progressed? Note that the EU was never intended to be just a free trade area, it was always intended to go much further. Articles 26 and 28 TFEU make it clear that a customs Union should be established which includes an internal market. The EU certainly has a customs union with a Common Customs Tariff which is exclusively regulated by the Commission. The degree to which a true common market has been achieved is more doubtful given the considerable case law still arising which is evidence of the sheer number of obstacles still in the way of the unified market. However, as from 1 January 20154, nineteen countries, which now represents over half of the member states, have gone further and established an economic and monetary union with a European central bank and a single currency.

Question 2

‘In spite of the aims of the EU Treaties, there is still not at the present time absolute freedom for a person in one Member State to import or export goods from or to another Member State.’

Discuss, explaining in particular the circumstances in which a Member State can lawfully restrict or prohibit the free movement of goods from another Member State.

Answer guidance

The first reference in this question is to the aims of the EU Treaties. You must therefore state the aims as contained in the preamble and Art 3 of the EU Treaty and generally introduce the provisions of the TFEU concerned with the free movement of goods, Arts 28–36 TFEU, the restrictions allowed the Member States in Art 36 TFEU and any tax on goods considerations arising from Art 110 TFEU. Outline, then, the rights provided by those Articles and the restrictions which are allowed the Member States by virtue of the TFEU. These can be highlighted by the provisions of Directive 70/50 and the first significant case, Dassonville. The derogations provided by Art 36 TFEU need to be explained and the further reasons whereby Member States can lawfully restrict the free movement of goods arising from the Cassis de Dijon case (120/78) should also be discussed.

Question 3

The UK Government has banned the import from France of nitrate fertilisers on the grounds that excessive nitrates in the soil are a danger to animal and human health. There is no ban on the production of this type of fertiliser in the UK but there is a government-issued code of practice advising that other types of fertiliser must be used but which does not amount to an outright ban.

The UK Government has also banned the import from Romania of all types of aerosol spray which contain CFC propellants on the grounds that CFCs constitute a danger to the environment. In the UK, a law which phases-out the manufacturer of CFC aerosols, over the next two years, has come into effect on the same day as the ban. Other CFC products are not banned domestically.

The French and Romanian Governments are considering asking the Commission to take action and need to know whether these bans are a breach of EU provisions on the free movement of goods. You are asked to advise them.

Answer guidance

You are asked to comment on the two bans on the import of goods coming under EU law provisions on the free movement of goods. As an introduction, you should briefly outline the free movement of goods as one of the fundamental areas of Union law and that the Court of Justice, if it considered these bans, would interpret the provisions with the aims of the Union in mind and any restrictions allowed the Member States, restrictively. The principal provisions to consider are Art 34 TFEU which prohibits quantitative restrictions on imports. Article 36 TFEU, however, allows the Member States to restrict imports for specific reasons and these include the protection on health grounds of humans and animals. You should therefore consider whether the bans come within Art 34 TFEU. Then you should determine whether the reasons given by the UK will be held to be justified under Art 36 TFEU. Not all the grounds stated by the UK Government are mentioned in Art 36 TFEU, only the health grounds in respect of the nitrate fertilisers are contained in that Article. The protection of the environment is not contained in Art 36 TFEU and the case of Cassis de Dijon (120/78) must therefore be considered.

Hence, you should introduce area of law and attitude of the CoJ to prohibitions and exceptions followed by identifying the material facts, and applicable law which will include Arts 34, 36 TFEU, Directive 70/50, the Dassonville case, Cassis de Dijon and consider the post-Cassis case law, notably Keck. With the aid of the relevant cases, reach conclusions on all the issues.

Question 4

‘The Cassis de Dijon case (120/78) has helped clarify the complicated mass of case law on Articles 34–36 TFEU and has done this in a sense notably favourable to the basic Union objective of creating a unified market.’

Discuss.

Answer guidance

The answer to this question requires a discussion of the case law on Arts 34–36 TFEU and the ruling of the Court of Justice in the Cassis de Dijon case. It would be best to deal with the material by considering the Treaty Articles first, then the case law arising from Arts 34–36 TFEU, and finally considering the Cassis de Dijon case and the follow-on cases. Whilst the law has moved on in free movement of goods and selling arrangements and subsequent case law needs also to be considered, it is still possible to be asked questions concentrating on what the case of Cassis de Dijon achieved. For this answer, provide a basic outline of Arts 34–36 TFEU, Directive 70/50 and case law arising from these and explain why you consider the emergent body of case law from these articles to be complicated, if this is your opinion. Consider then the exceptions provided by Art 36 TFEU and its case law. Discuss Cassis de Dijon in detail and the difficulties which arose from it. Finally, the particular issues to be answered are whether it is considered that the Cassis de Dijon ruling has clarified the complicated mass of case law and whether it has helped achieve the creation of a unified market. It is important for the answer to this question to demonstrate awareness of, and to address the fact that, the Cassis de Dijon case is important for two principles of law.

Whilst not strictly required to answer the question—and only if you have time, have answered the question set fully, and are really on top of this topic—you could consider any refinements of the Cassis de Dijon case which have taken place as a result of the misunderstandings as to its application and the attempts of the CoJ to clarify its scope. For example, notably in the Keck and Mithouard cases (C-267 and 268/91) and subsequent cases.