The European Union (EU) is the world’s most developed model of regional cooperation and integration. The free movement and exchange of goods was one of the primary reasons to establish the European Union. The EU has progressed from a customs union to a Single Market and the euro area of nineteen countries. European countries have proceeded gradually along the various steps required to create a regional community such as a free trade area, a customs union, a single market, a single currency, a common passport area, and a common foreign policy.9
Currently the European integration process has grown the European economy to a point in which it covers almost the whole continent, with twenty-seven countries now members. Within this integrated market, several policies have been harmonized or transferred to the European level. Introduction of a common European competition policy enabled fair competition among the member states. Given this market situation, companies within the European Union market can compete on the basis of their real comparative advantages rather than being protected by discriminating barriers to trade. 10
In fact the EU has one of the strongest competition policy systems worldwide. The aim of the EU competition policy is to safeguard the correct functioning of the single market. In essence, it ensures that enterprises have the possibility to compete on equal terms on the markets of all Member States. European competition rules are established principally to protect competition, prevent distortions in the market and ensure fairness for market participants.
The framework strives to ensure that governments and companies obey EU rules on fair competition, while providing sufficient space for innovation, unified internal market standards and the development of small businesses. EU competition rules also apply to agreements concluded outside the Union if they have effects within the internal market. The EU competition law applies to all the Member States as well as to other countries that form the European Economic Area: Iceland, Liechtenstein and Norway. The policy also applies to non-EU companies operating on the single market.11
Setting the EU’s common trade policy and tariffs enables cooperation between nations. The Single Market of the EU is established as one economic entity and international trade agreements are the main external competence of the EU. 12 The EU helps its members to protect themselves against the dominant economic powers of their outside trading partners and continues to open up markets outside Europe in the midst of rising protectionism. 13 The EU’s market access policies help to improve conditions for European companies to export worldwide and to make sure that their trading partners follow international trade rules.
The EU enforces its rights under international trade rules alongside the EU’s trade agreements with partner countries. The EU also uses trade defense instruments to stop imports of artificially cheap goods from flooding the EU market, and imposes additional import duties so that competition is fair. The Commission negotiates with trading partners to raise the standards of intellectual property in non-EU countries, protect the intellectual property of EU companies and to stop the trade in counterfeit and pirated goods and services. 14 The latest Trade Barriers Report provides examples of the EU supporting actions in 2019, for example the following: 15
- Beef exporters from France, Ireland and the Netherlands regained access to China, producers from Ireland and Croatia recovered access to Japan, and Dutch pork producers can export also to Mexico.
- Polish producers of baby milk powder can export again to Egypt (check for detailed case description at the EC site).16
- Belgian pear producers regained access to the Mexican market.
According to the French Council of Economic Analysis, European competition policy is rather successful in achieving its current goals: promoting investment, productivity and purchasing power. 17 An earlier study commissioned by the European Parliament has proved that antitrust policy, merger control, State aid control and liberalisation contributed significantly to economic growth in Europe. Effective competition was found to be a driver of an efficient internal market that delivers growth and jobs.
Therefore the Commission firmly supports its long-standing view that competitiveness is improved through the exposure of businesses to merit-based competition, which needs to be open and take place on a level playing field. 18
