The EU & the Customs Union.

For your information

The EU Customs Union and Single Market

Background

The Customs Union and Single Market go back to the earliest days of the EU’s history, when its forerunner, the European Coal and Steel Community (ECSC), set up a committee (the Spaak Committee, named after Paul-Henri Spaak, the Belgian Minister for Foreign Affairs) in 1955 to draw up proposals for the creation of a common market and the establishment of an atomic energy community. This committee was made up of representatives of the ECSC member states along with Britain.

The ECSC consisted of West Germany, France and Italy plus the three Benelux countries. Together with Britain, they formed a bloc of the main powers of western Europe in the conditions of the Cold War, aligning themselves, but at the same time in competition, with the US camp. The attempt was to redefine a role in the world for these old European powers, in response to the emergence of the two superpowers. Britain also had its own separate interests as the centre of the its old fallen empire. The context was also that of the Post-War social democratic arrangements that prevailed across western Europe, in which a social contract still existed between people, civil society and the state, and a functioning public authority still operated. Supranational arrangements had not yet begun to supersede nation states, but development had reached a level in the advanced economies that demanded increased interdependence and the beginnings of modern globalisation. [1]

In that context, the General Agreement on Tariffs and Trade (GATT) had been signed in 1947 in Geneva, which was an agreement between various states, the core being the Anglo-American countries, aimed at the “substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.” A number of further rounds of GATT talks were held so that, and by the fifth “Dillon” round in 1960-62, some 26 countries were involved.

The report of the Spaak committee formed the basis of the discussions of the subsequent Intergovernmental Conference on the Common Market and Euratom in 1956, the outcome of which was the establishment of a European Economic Community (EEC). The EEC was formally created by the Treaty of Rome, signed in 1957 by the ECSC countries. Britain was not a part of the EEC at that stage.

The Customs Union

The Treaty of Rome planned the creation of the Customs Union, which was eventually established on July 1, 1968, by the six member states of the EEC. This lifted all customs duties and restrictions between those states, and established a common tariff on imports from outside the bloc.

The European Commission explains that the EU Customs Union in its current form as defined by the Community Customs Code, adopted in 1992, means:

  • No customs duties at internal borders between the EU Member States;
  • Common customs duties on imports from outside the EU;
  • Common rules of origin for products from outside the EU;
  • A common definition of customs value.

The common external tariff distinguishes the Customs Union from the lower level of integration known as a “free trade area”. As a form of supranational trade policy, facing the outside world as a single entity in this respect, it is already a form of political as well as economic integration.

The present legal framework for the Customs Union is defined by the Union Customs Code, which came into force on May 1, 2016 with the stated objectives of modernising and simplifying the arrangement, including the transition to fully electronic customs.

Currently, membership of the EU Customs Union is virtually identical to membership of the EU itself, with the addition or exception of various territories of EU member states.

The EU also has bilateral customs unions in place with Turkey, San Marino and Andorra.

To be continued: the European Single Market.

Notes

[1] It is important to bear in mind when looking at these origins that a shift occurred in the late 1970s from social democracy, which had gone into crisis, to neoliberalism. The present neoliberal period is characterised by: the restructuring of the state under the anti-social offensive where all of the previous arrangements of civil and political society lie in tatters; the end of the bipolar division of the world; the crisis of the nation state and the rise of supranational organisations; the unrestricted imposition of monopoly right; and conditions of generalised disequilibrium. The institutions and agreements set up straddle these two periods.

Main sources: European Commission, ec.europa.eu; Centre Virtuel de la Connaissance de l’Europe (CVCE), http://www.cvce.eu.

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