Abstract
The single market programme of the EU covers services as one of the four fundamental freedoms. While the legislative effort has been impressive and positive results evident in areas such as mobile telephony and low cost air transport, the impact on many services has been weak as yet. This holds in particular true for a group of services that share specific characteristics such as the overriding importance of quality, the existence of asymmetric information and the need to produce in a tailor-made way. The combination of these characteristics and trends such as globalisation, the usage of ICT and enlargement, calls for a fresh view on the functioning of the single market. An effective future single market is based on a bottom up approach, integrating single market policies with other policies, starting from the functioning of national markets and being less uniform in nature.
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Notes
With the exception of certain basic provisions such as non-discrimination.
Labour productivity for non-market services can not be reliably established. For an extensive discussion of measurement of productivity for non-market services see the Atkinson Review: Final Report (2005).
For the EU as a whole, intra-EU trade is part of domestic production. However, since the purpose here is to indicate the extent to which services can be traded cross-border, total trade (intra + extra EU) is used here to calculate the ratio.
For a further examination of services divided into contact and intermediation categories, see Haskel (2007).
Within the EU of course exports should equal imports apart from reporting errors.
The OECD data would appear to overstate the growth of US firms relative to European ones since American start ups employ less people than those in Europe.
For a recent overview of challenges to the single market see Delgado (2007).
Haskel and Marrano (2007) in a similar exercise for the UK arrived at very comparable results.
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We are grateful to Roger Liddle and to European Commission services for commenting on various drafts.
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The views expressed in this article are the views of the authors and not necessarily those of the European Commission. At the time of writing, both authors were at the Bureau of European Policy Advisers, European Commission.
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Canoy, M., Smith, P.M. Services and the Single Market. J Ind Compet Trade 8, 319–347 (2008). https://doi.org/10.1007/s10842-008-0041-2
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DOI: https://doi.org/10.1007/s10842-008-0041-2