growth in the EU1. However these gains could have been considerably higher if the removal of most of the remaining barriers was achieved. They do not always allow stakeholders to take full advantage of the single market and more specifically cross-border trade2. Many bureaucracies result from differences between nation-al legal systems, for instance the existence of 28 different tax systems which cause considerable administrative burden to companies3.

Since the start of the crisis, the EU has taken urgent measures to enable financial markets to operate again and to make them stable.Nevertheless, further measures must be taken to benefit the real economy and encourages sustainable economic growth. With trade relations throughout the EU becoming more and more reliant upon information and communication tech-nologies (ICTs)4 , the digital sector is a main driver for productivity and creativity- as Jean-Claude Juncker, the President of the European Council (EC) declared: “(...) the key ingredient is to create a Digital Single Market (DSM5).” where individuals and businesses are free to trade cross-border online making no sense for each EU country to have its own rules for telecommunications services, copyright and data protection. The DSM it’s built on the concept of the common market which ensure that all citizens, regardless of where they live, can benefit from and contribute to it6. The cur-rent situation is particularly prejudicial for small and medium-sized enterprises (SMEs) being dramatic the fact that so far only 14% trade online7, bearing in mind that SMEs make up 99% of all businesses in the EU. The EU is undoubtedly stronger as a collective in the new world order of trade mar-kets aiming to establish peace and stability, economic growth and sustainable

INTACommittee on International Trade chaired by

Margarida Pereira (PT)With there being renewed calls by Jean-Claude Juncker for the European Union to adopt a Digital Single Market as detailed within the Europe 2020 strategy, how can the EU best proceed with the development of such a framework which brings enhanced trade benefits to all stakeholders, whilst at the same time re-specting the complex legal barriers that exist between Member States?

1.ABSTRACT

The European Union (EU) is facing a moment of transformation to come out stronger from the recent crisis- it needs to turn into a smart, sustainable, and inclusive economy that can in turn create high levels of employment, productivity, and social cohesion-. One of the biggest opportunities to boost the EU’s economic growth is the imple-mentation of a Digital Single Market, as it is prioritized by Europe’s 2020 strategy. Estimates predict an additional € 250 billion of growth-potential within Europe. The process of establishing such a framework is an incredibly complex procedure, with there being a veritable minefield of legal barriers that need to be over-come or navigated in order to achieve full market parity amongst Member States- therefore, benefit of what could represent a social and economical milestone to the EU itself-?

2.OVERVIEW

The European Union and its Member States have been engaged in how can the EU overcome these obstacles in order to make all the Member States the process of market integration over a long period- in the mid to late of 80s, Europe started to come up from stagnation, propelled by a drive to facilitate the internal trade by the removal of barriers on products and services between Member States’ markets- the objective was to held together the fragmented national markets and create a frontier-free single market-.It’s clear that the lowering of those obstacles has brought numerous benefits to more than half a billion citizens: as not only the freedom to travel, study and work abroad but also through wider choice of products and lower prices. Traders have been able to operate unhindered across borders boosting their efficiency and competitiveness. Between 1992 and 2006, these measures on an integrated economy generated an additional 2.75 million jobs and 2.15 percent in

1.European Economy Economic Papers, No 271, January 2007, page 8;2.See also: https://www.youtube.com/watch?v=1Qi3iOBLQbY; 3.See also: https://www.youtube.com/watch?v=ev3lOsKYwzs; 4.Definition - What does Information and Communications Technology (ICT) mean?: http://www.techopedia.com/defini-tion/24152/information-and-communications-technology-ict; 5.Find full speach here: http://juncker.epp.eu/my-priorities ;6.See also: https://www.youtube.com/watch?v=thJ2AelUVkQ&list=UUYBQQU7VCu8M6djxI4dvpIg;7.Digital Agenda Scoreboard 2014: https://ec.europa.eu/digital-agenda/en/news/scoreboard-2014-progress-report-digi-tal-agenda-targets-2014

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development in Europe. It requires collective commitment at European level, which must respect the Union’s status as a facilitating body and look to create an outcome which remains beneficial for the range of stakeholders.

• What does the Single Market mean to European citizens?• What are the main benefits and shortcomings of the topic?• Why is it a framework like Digital Single Market being adopted in Europe?

3.STAKEHOLDERS

The development of a framework such as the Digital Single Market affects mainly three categories: EU individuals, consumers and companies (especially the SMEs) - national and regional, public and private, economic and social.The cross-barrier trade is a space that must benefit all European citizens, protecting them, and ensuring that their rights are respected. The reality is that awareness of the internal market and its benefits is not yet wide-spread and many people are still facing difficulties to reach it fairly: there are still labour issues, inequalities, problems with recognition of academic qualifications, and many others. From a consumer perspective, products and services such as phone calls, SMS and access to the internet should be usable without any geographical discrimination, on the same terms when the consumer is home and wants to connect with some-one in a different Member State, and when the consumer is travelling within the EU (roaming9). However, Europe still faces negative market discrimination among consumers which is evident in the difficulty to reach products and services from other Member States10, together with the fact that some web traders are not willing to sell cross-border11.A trade is only fair if both players, consumers and entrepreneurs, take advantage of it. But the fragmentation of the market continues to hinder firms in scalability, flex-ibility, and cost-effectiveness. Businesses and small innovative firms are discour-aged by the legal and structural hurdles they encounter12 as for example at the moment they have to register more than once and in different countries in order to operate online. Clearly there must be enforced and respected rules, particularly where they are put in place to protect the consumer, but those rules should make things simple.

Moreover, not only European countries are themselves beneficiaries of a truly single market, as it is estimated 4% growth in GDP (Gross Domestic Product) by 2020, but also governments can also achieve significant efficiencies by embracing digital technologies with the example of Estonia’s successful e-governance initiative13. Single market policy can only be enriched by the contribution of a wide range of stakeholder- consumers, small investors, small businesses, NGOs and represen-tatives of local and regional authorities can contribute to reach wider choice, lower prices, greater economic growth and more jobs-.

• How would security as well as awareness of consumers’ and retailers’ rights and obligations online be improved?• Which strategy should be considered for a balanced Single Market development capable to deliver concrete benefits to business, consumers and EU nationals?• How can the full potential of digital single market be aimed both to consumers and businesses?

4.MAIN CONFLICTS AND CURRENT SITUATION

The impact of language barriers and varying levels of economic development, the purely economic vision on the social dimension of the single market, the lack of information and security/privacy concerns about the topic, the fact that the Member States continue to compete with one another economically seeking their own national interest rather than the greater good of the EU and finally, the absence of a number of member states from the single currency are considered the main obstacles to the achievement of economic integration. The single market is still largely fragmented, essentially into 28 national markets. The current framework does not fully address such fragmentation, with Union rules merely defining a baseline which are often implemented in diverging ways by the Member States. A truly single market should promote competition, investment and innovation in new and enhanced networks by promoting market integration and

8.Infographic: EPP & Digital Single Market: http://juncker.epp.eu/sites/default/files/attachments/infographic_digital_sin-gle_market.pdf;9.More about Roaming: http://ec.europa.eu/digital-agenda/en/roaming;10.See also: https://www.youtube.com/watch?v=FGpSpicZC8Q;11.See also: https://www.youtube.com/watch?v=D6Aatv5ea0Y;12.See also: https://www.youtube.com/watch?v=g22ydMKWLxU;13.More about e-Government: http://ec.europa.eu/digital-agenda/en/living-online/public-services;

INTA - Committee on Internal Market

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Treaty (1993)20, the Amsterdam Treaty (1999)21 and the Lisbon Treaty (2009)22. In parallel there were major efforts made to deepen integration within the existing framework: the first of many Internal Market Action Plans (1997)23, the Financial Services Action Plan (1999)24 and the Services Directive (2006)25.The EU now stands for the Commission’s proposition on a smart, sustainable and inclusive strategy - Europe 202026 - that calls for i) adapting public policies more towards promoting green and innovative goods and services, while ensuring open and competitive markets ii) improving framework conditions for businesses to innovate, including the effec-tive and efficient protection of intellectual property rights through the introduc-tion of the single EU patent and a specialised Patent Court27 iii) creating an open Single Market for services on the basis of the Services Di-rective, while at the same time ensuring access to quality services for all consumers iv) stepping up the process of adapting Single Market policies and legislation to the digital era: creation of a Digital Single Market28 v) improving SMEs’ access to the Single Market, e.g. by further simplifying company law and improving access to finance vi) putting into place a new strategy to promote corporate social responsibility and

cross-border services and goods offerings. In the digital field there is a relatively low level of cross-border e-commerce at a time when such activity within individual Member States has been growing quickly. But despite all the digital opportunities that have been improving over the years, 18% of the EU28 population have still never used the Internet and the majority of small and medium-sized enterprises (86%) hardly begin to exploit commercial opportunities of the digital market14. On one hand, businesses name the higher risk of fraud and non-payment, the higher delivery costs and the different fiscal regulations of the different Member States as reasons for the refusal of cross-border selling and differ-ences in pricing. One the other side, there are unsatisfied and mistrusted consumers, whose rights are often being undermined. Along with all that, it is still clear that there is a deficit in digital skills, especially amongst the older generation. To tackle some of those inconveniences, the European Commission set out the Digital Agenda for Europe15 that will update EU single market rules for the digital era. The grow-ing availability of digital infrastructures and services should in turn increase consumer choice, quality of service and diversity of content, and contribute to territorial and social cohesion, as well as facilitating mobility across the Union.

• What measures should be taken to help improve growth, competitiveness and job creation in the Single Market? • How much ‘national interest’ do member states retain?• What should be the priorities for the Digital Single Market?

5. LEGISLATIVE BACKGROUND

In 1957, the Treaty of Rome was signed establishing the European Economic Commu-nity (EEC16 Its aim was the creation of a Common Market which involved a customs union and the free movement of goods, persons, services and capital.Despite all the significant steps that had been made, for instance the achievement of the Customs Union17 and the abolishment of duties between Member States, there re-main a lot of obstacle to overcome. It was then, in 1985, that the EU launched a White Paper18 that listed 279 specific legislative measures to be brought into force by 1992. To achieve them, the EU reformed the Treaty of Rome and adopted the Single European Act19, and in 1993 almost all of the original 279 measures had become law and the single market became a reality. Over the years there were considerable Treaties affecting this subject: the Maastricht

INTA - Committee on Internal Market

14.Accordingly to the Digital Agenda Scoreboard 2014: ;15.Digital Agenda for Europe: http://ec.europa.eu/digital-agenda/;16.European Economic Community: http://en.wikipedia.org/wiki/European_Economic_Community;17.Customs Union: http://en.wikipedia.org/wiki/Customs_union;18.White Paper: Completing the Internal Market: http://europa.eu/documents/comm/white_papers/pdf/com1985_0310_f_en.pdf;19.The Single European Act: http://europa.eu/legislation_summaries/institutional_affairs/treaties/trea-ties_singleact_en.htm;20.The Maastricht Treaty: http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_maastricht_en.htm;21.The Amsterdam Treaty: http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_maastricht_en.htm;22.The Lisbon Treaty: http://europa.eu/lisbon_treaty/glance/index_en.htm;23.Internal Market Strategy: http://ec.europa.eu/internal_market/strategy/previous_strategy_en.htm;24.Financial services: Commission outlines Action Plan for single financial market: http://europa.eu/rapid/press-release_IP-99-327_en.htm?locale=en;25.Directive on services in the Internal Market: http://ec.europa.eu/internal_market/services/services-dir/index_en.htm;26.Europe 2020: http://ec.europa.eu/europe2020/index_pt.htm;27.Unified Patent Court: http://en.wikipedia.org/wiki/Unified_Patent_Court;28.Actions for a Digital Single Market: https://ec.europa.eu/digital-agenda/en/connected-continent-legis-lative-package;

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7. USEFUL LINKS FOR FURTHER RESEARCH

The European Single Market: http://ec.europa.eu/internal_market/top_layer/index_en.htm

Obstacles to a European Single Market: http://www.eesc.europa.eu/resources/docs/qe-32-12-328-en-c.pdf

Your Europe (Information, help and advice on EU rights for EU nationals and businesses): http://europa.eu/youreurope/business/index_en.htmSOLVIT (Solutions to problems with your EU rights): http://ec.europa.eu/solvit/index_en.htm

Members of the European Parliament from across Europe give their thoughts on the costs, benefits and future of one the single market: http://www.bbc.co.uk/democracylive/europe-21658420

The UK vision for the EU’s digital economy: http://engage.number10.gov.uk/digi-tal-single-market/

Establishing the Digital Single Market: policy recommendations: http://www.epc.eu/dsm/6/Policy_recommendations.pdf

Why the EU needs a Digital Single Market - Speech by Vice-President Ansip: http://europa.eu/rapid/press-release_SPEECH-14-2182_en.htm?locale=enEurope’s digital challenge: http://ec.europa.eu/europe2020/pdf/20131010_en.pdfInnovating in the digital era - putting Europe back on track: http://ec.europa.eu/eu-rope2020/pdf/20131024_en.pdf

Digital Agenda Scoreboard: http://ec.europa.eu/digital-agenda/en/scoreboard

vii) reforming the financial system to ensure a solid, stable and healthy financial sector supporting the real economy.

• What steps should be taken to enable businesses, in particular SMEs, to have access to and reap the benefits of the Single Market?• Which sectors of the Digital Single Market should be focused on to reduce barriers for consumers and businesses?• How will any form of integration affect current policies and future economic devel-opment?

6. PROSPECTS AND OUTCOMES

The establishment of a single market has been a core element of the European Commision and one of its most important achievements to date. However, significant economic and political developments, such as the financial crisis, the Union’s enlargement and the important trade imbalances between the member states, have led to a reassessment of the costs and benefits of the single market in the domestic context.The truth is that political questions still remain largely outside of single market discussions even though it clearly raises political controversies (e.g. autonomy of member states, social policy, immigration). Indeed, the interaction of different elements in the single market – its laws, its eco-nomics and its politics – remains far from reaching a satisfactory balance.A number of politicians might criticise their own regulatory authorities for acting against the ‘national interest’, asking if it is worth it to put the EU integration in front of national profits. But others believe that it all comes down to three guidelines: in-clusion- by making sure no one in no where is left behind-, transparency- ensuring that consumers understand their rights and duties on the market- and openness- by making sure no Government can control access and content-. The single market today faces important challenges: EU policies have been over years trying to solve it, and consequently they collect significant concerns domesti-cally. It is becoming increasingly clear that the political implications of the single market cannot be isolated from its regulation and that a culture of more open debate amongst the EU and its Member States is required. The single market is not an area of concrete matters; it increasingly leaks into particularly sensitive fields. Whilst it is important to keep discussions about market regulation open to political is-sues, it is equally useful to keep this debate collective and forward-looking.

INTA - Committee on Internal Market25

INTACommittee on International TradeOpinion piece by Sara Jasionowska

The European Union’s economy is far behind the world’s biggest economic powers such as US or Japan. One of the biggest opportunities to minimize this gap and boost the EU’s economic growth might be the implementation of the Digital Single Market among the Member Countries.The borderless nature of digital technologies means that there is a chance for the EU citizens to enter the more competitive and innovative market place. It has been estimated that by fostering the Digital Single Market pro-ject more than 250 billion euro1 in additional growth can be created along with providing hundreds of thousands of new job opportunities. This could contribute to the total 4% increase of the EU’s GDP2.Currently, only around 8%3 of the EU citizens buy online across the borders even though 1 in 3 households has an access to the broadband. This, to-gether with the fact that only 39%4 of online shops allow for across the bor-ders purchases indicates that the endless possibilities of the digital techno-logies are not exploited. However, this idealistic vision has to tackle certain challenges and obstacles before the EU citizens can benefit from it. The reason why the EU is lagging behind the main competitors in the ICT investment is the lack of transpa-rency and standardised legislative rules among the Member Countries.The biggest challenges of the DSM are the framework conditions such as tax and intellectual property regimes, skills gap, state-aid and potential danger of online hacking.5 Can the EU overcome those issues? I believe that the potential benefits outweigh the primary efforts and that DSM will allow the unprivileged Member States to become more powerful and com-petitive. On the other hand, is it possible to unite the stakeholders and

1http://ec.europa.eu/digital-agenda/our-goals/pillar-i-digital-single-market2http://www.epc.eu/dsm/6/Policy_recommendations.pdf3 https://www.youtube.com/watch?v=UGGETntnrDk4 https://www.youtube.com/watch?v=UGGETntnrDk5 http://ec.europa.eu/dgs/connect/en/content/digital-single-market-0

impose the new rules on the existing companies? Is the future growth of the EU more important than the growth of individual companies? Implementing the new rules with regard to the united online market place might not be perceived to be equally beneficial for all the actors- consumers and providers but in the long run it might indeed contribute to the facilitation and improvement of the quality of live among the EU citizens.