Tariff disarmament completed thanks to the customs union, in July 1968, had eliminated customs barriers to intra-Community trade. But there still remained technical obstacles to trade and the EEC Treaty had not fixed a timetable for their elimination. Technical barriers to trade result from national regulations obliging the producers of industrial products and foodstuffs to satisfy certain criteria or to meet certain standards and technical specifications. This legislation is necessary for various reasons: standardising industrial production, guaranteeing the safety of workers, protecting the health of consumers and preventing or reducing environmental pollution, etc. The problem for the common market was not the existence of national regulations, but the differences between them and also the fact that those regulations could be used to protect the national market from products from other Member States which were subject to different standards
Technical barriers to trade resulted from disparities in the technical standards for the production and marketing of goods. The disparity that existed between countries in terms of technical requirements stemmed from historical and economic considerations. A country in which a product was imported rather than manufactured tended to impose stringent requirements on it and checks prior to its being placed on the market, without concerning itself greatly about the economic cost, which that represented. On the other hand a producer country of an industrial product tended to be more tolerant taking into consideration the economic implications of requirements and controls, an excessive stringency of which would penalise its industry. In any case, the various technical regulations could hinder trade even more than customs duties (eliminated thanks to the customs union) [see section 5.1.2]. Indeed, even a high customs tariff could be paid and a product originating in one country could enter the market of another, if its consumers preferred it. On the other hand, if a product did not comply with the different technical standards, its entry to that country's market was completely blocked.
The result was that the industrialist who wished to export to the other EEC member countries was obliged to bear additional research, development and production costs in order to comply with all the national standards which his products had to satisfy. Thus the disparity of the legislation within the original Community compelled producers to manufacture different components, increase their production lines, diversify their stocks according to country of destination and have specialised distribution and after-sales services for each country.
All the above made production on the Community scale more costly than it should have been and favoured large undertakings (firms, companies) rather than small and medium-sized enterprises (SMEs). Large undertakings, in particular multinationals, had the structure, experience and personnel required to meet the specific requirements of the markets in several countries and could spread the additional costs over long runs in such a way that they represented a negligible fraction of the unit cost of the product. For small companies, however, the additional costs represented a substantial fraction of the production unit cost and could be prohibitive to any exports. The abolition of technical barriers to trade eliminated this disadvantage of SMEs.
The impetus given by the Single European Act to the efforts of the Commission helped to eliminate this problem and thus establish the single market. The adoption of the directives establishing the single market solved the major problem in the free movement of goods [see section 6.2.1]. A supplementary problem is the not complete or correct transposition of the directives relating to the realisation of the single market [see COM/95/500]. A Council Regulation reiterates the obligations of the Member States to take all necessary measures to facilitate the free movement of goods in the EC/EU and establishes an early warning mechanism in the event of an obstacle or the risk of an obstacle to the free movement of goods, as well as a specific mechanism enabling the Commission to request a Member State to take the measures necessary to remove such an obstacle [Regulation 2679/98 and COM/2001/0160]. The Member States have all agreed on the principle that penalties be applicable for breaches of the internal market law [Council Resolution].
The free movement of goods within the European Community/Union established by Articles 28 and 29 of the Treaty on the functioning of the EU (ex Articles 23 and 24 TEC) is in actual fact safeguarded by the infringement procedure provided in Article 258 (TFEU, ex Article 226 TEC) [see section 4.1.2.]. The Commission invokes those procedures whenever it records an infringement of Community provisions attributable to any authority whatsoever of a Member State (including judicial authorities) [see case 224/01]. It may consider a case as a matter of routine in the light of information provided by Members of the European Parliament or published in the press or in the official journal of a Member State. Usually, however, a complaint is brought before it by a company, an association or even another Member State in respect of draft standards or technical rules of a Member State. Article 36 (TFEU, ex Article 30 TEC) allows some restrictions on imports on grounds of public morality, public policy or public security, but specifies that they must not constitute disguised restrictions on trade between Member States [see case 178/84]. According to the Court of Justice, willing to ensure the survival of a company cannot be a justification founded on this Article [see case 324/93].
Cooperation between the Commission departments and the national administrations has proved to be the most reliable way of ensuring that European law is observed. A Council resolution calls for developing such cooperation in the areas where it is insufficient and particularly in the area of industrial products [Council Resolution].