In shaping the internal market in the European Union, much attention has been given to matters such as harmonizing rules and preventing discrimination, so that there is a level playing field. Economic interests seem to have received more attention than an issue such as environmental protection. Therefore, this article answers the following question: what does the level playing field mean for environmental protection and what opportunities are there?

Today we know the European single market, which enables people, services, goods and capital to move more freely.[1] The Treaty of Rome (1957) identified the creation of an internal market as one of the central objectives of European cooperation.[2] In 1985 the process accelerate when The Commission presented a White Paper, in which it abolished physical, technical and fiscal boundaries with a seven-year program and numerous guidelines and regulations.[3 4] The real momentum in establishing a common market only started in 1986 with the Single European Act (SEA) abolishing the requirement of unanimity in many cases.[5 6]

The Single Market was finally put in place on 1 January 1993.[7] Since 1997, European citizens have also been able to move freely within the EU, when the Schengen zone was included in the Amsterdam Treaty.[8 9] With the Services Directive in 2009 free movement of services was (partly) realized.[10 11] In 2010, the Commission presented a broad package of proposals to deepen the internal market even further, referred to as the 'Single Market Act'.[12] In October 2012, the Commission subsequently proposed the Single market Act II, with measures to ensure a more integrated internal market.[13 14]

In the period from 1957 to 2012 the emphasis was mainly on the economic dimensions of the single market and the concept of a level playing field (LPF). This stems from the idea that ‘all economic actors should be bound by the same set of rules and conditions to ensure that there is fair competition between them….. which has governed economic interactions between member states’. [15] The focus on the economic dimensions of the single market is still a central aspect of single market policy.[16]

An important aspect of a level playing field is harmonization. Harmonization means that divergent national rules are excluded so that the free movement of products within the EU is guaranteed.[17 18] Article 114 (3) of the TFEU has as its object that other interests than purely economic ones, such as health, safety, environmental protection and consumer protection, will take as a base a high level of protection. However, practice turns out to be more complicated. [19] This is because the economies of the different Member States in Europe traditionally differ.[20] One consequence of this is that Articles 114 (4) (5) TFEU make it possible for Member States to deviate from the harmonization measures in order to adhere to stricter levels of protection. [21] It is only in areas that are not mutually equivalent that member states can invoke national restrictions, practices, and traditions, and restrict free trade in the Community. This is the concept of mutual recognition, which has been central to EU market integration.[22 23]

The possibility of deviating from the existing legal rules is reflected in Article 36 TFEU with the principle of derogations. Article 36 provides an exhaustive list of derogations from the principle of free movement of goods.[24] The deviations indicate the community's priorities in the 1950s. The court has therefore added a list of justifications, mandatory or public-interest requirements.[25] ‘As with the Article 36 TFEU derogations, mandatory requirements are available only in the absence of harmonization’. [26]

The idea was that a level playing field with regulations would prevent a race to the bottom in social and environment standards. [27] However, regulating environmental protection through the exceptions ensures that the environment is subordinated to economic interests. A clear example of this is the European Nitrates Directive. This directive states that in all European member states no more than 170 kg nitrogen from animal manure per hectare of land may be applied. An exception to this has been made for a number of countries, including the Netherlands, through derogation. [28]

In the Netherlands, the Experts Committee on the Fertilizers Act has assessed the possible environmental effects if the derogation of the Nitrates Directive is not extended. They indicate that if there were no derogation, the nitrogen deposition on nature would decrease and the negative effect of nitrogen on biodiversity would be reduced. However, because without a derogation farmers are economically disadvantaged, the Committee believes there is a good chance that the grassland will be converted into maize land, which will lead to more nitrate leaching into the environment. That is why the Committee recommend extending the derogation.[29]

A level playing field also has an effect on international trade. Preventing trade disruption and discrimination (of countries) was the most important starting point in international trade.[30 31] The World Trade Organization (WTO), successor to The General Agreement on Tariffs and Trade (GATT), covers about 90% of global trade. [32 33] A level playing field relies on a common set of rules which are arbitrated consistently. Internationally, this has been a challenge. [34] The GATT always opposed attempts to restrict trade that were based on the way products were made. Discrimination was prohibited if the product as it arrived at the border was ‘like’ another national or imported product, no matter how it was produced. [35] The WTO has tried to change this, but so far this has been difficult. An important reason for this is its reliance on consent from all participating countries.[36] As in the internal market, the focus at an international level has therefore always been more on economic interests than on the method of production (with an eye for environmental protection).

Discussion and conclusion 

Regulations to enable the European internal market and international trade are primarily aimed at creating a level playing field. An important reason for this is that the LPF concept assumes that markets basically have the same access to knowledge and materials and have comparable markets and customer requirements.[37] The reality is different, as evidenced by the fact that trade is needed at all. [38] Protection of the environment is not part of the basic rules, but is mainly regulated by exceptions to the rules. In theory, this could benefit the environment, but in practice countries more often opt for measures that ensure that they can sell their products in as many places as possible, within Europe and worldwide. The example of the nitrate derogation in the Netherlands shows this well. Economic interests often turn out to be more important than environmental protection.

Anja Haga