Fundamental changes in Romanian trade policy after the accession to the European union.

Toba, Elena ; Simion, Dalia

The adoption of EU trade policy by Romanian on multilateral, interregional, regional and bilateral plan in its relations with third countries outside the community inevitably brings important changes in our country's foreign trade policy (1) starting from 1st of January 2007, in the following directions:

a. absolute deregulation of Romanian trade with EU;

b. alignment of custom duties in our country, towards the third countries, to the ones in EU, which generally implies custom duties to a level sensible reduced toward the third countries compared to the level of custom duties in Romania, especially for the industrial products;

c. adjustment with the EU agreements to OMC in the field of trading with goods and services;

d. accession to the OMC Agreement regarding the public purchase;

e. transformation of Romanian from a country beneficiary of SGP in a grantor country of custom preferences;

f. retreat from the Global System of Trading Preferences (GSTP) between developing country and from the "Protocol of 16" developing countries, by abrogation of preferential trading agreements with third countries and of other agreements concluded with these countries or to adjust them to the community aquis;

g. hold up the status of developing country and, as a consequence the advantages Romania beneficiates from in the field of trading policy, in the virtue of this status; this fact also imply the retreat of Romania from the group of unofficial developing countries from OMC and from the "Group of 77" developing countries which acts in UN;

h. etreat of Romania from agreements with CEFTA, AELS from the free trading agreements concluded with Turkey, Israel, from the free trading agreements with the countries from the Western Balkans, in case it concluded any agreements with these countries;

i. because EU did not concluded a free trade agreement with Moldavian Republic until the date of Romanian accession to EU, starting from 1st of January 2007 the free trade agreement between Romania and Moldavian Republic had been terminated;

j. participation of Romania to EU preferential and non-preferential trading agreements:

--accession of Romania to the European Economic Space (EES), to which EU and Ireland, Liechtenstein and Norway participate;

--participation to the preferential agreements of Euro-Mediterranean partnership and to the partnership between EU and African countries, Caribbean and Pacific (ACP);

--access of Romania to free trade agreements between EU and countries from Latin America, Persian Gulf and other countries with which EU will conclude such agreements.

Starting with 1st of January 2007, Romania adhered to EU, in this way being eliminated the last restrictions from the mutual trade with goods with the member countries of EU (this is about the fact that from 1st of January 2002 had been deregulated the trade with industrial products, and now had been deregulated the trade with agricultural products).

To create a single market represents the essence of European Union, consisting in turnover of goods, services, capital and people between the member countries. So, it reach the situation that, by the four free turnovers between the countries member of EU, to form a single market where the turnover is similar to the one developed in one country; as a result of eliminating the obstacles and opening the national markets, the exporters from the countries member of EU succeeded to have free access to a market which reaches almost 500 millions consumers.

The single market was realized by adopting numerous Directives by the institutions in EU, where had been removed the technical barriers, the bureaucratic laws and protective and non-protective tariff laws of the member countries and it was established the free trade and free movement insidee the European Union.

The fundamental principles of the EU single market which Romania compels to respect are:

1. Free turnover. Starting from the 1st of January 2007, Romania adhered to EU, in this way being eliminated the last restriction from the mutual trade with goods with the countries member of EU (this is about the fact that from 1st of January 2002 had been deregulated the trade with industrial products, and now had been deregulated the trade with agricultural products).

The single market allowed a development of competition between the companies inside the countries member of EU in the benefit of the consumers, because the offer of goods and services had been on one hand, bigger, and on the other hand the prices decreased.

Inside the single market, the free turnover is based on the mutual recognition principle of single market. This consists in a free turnover for the goods and services of one member country into other member countries, even though these are manufactured after different quality regulations and standards having the condition to strictly observe the regulation of common interest regarding the public health, environmental

protection and consumerism.

A second principle which functions generally inside the single market is the principle of origin regulation. In this case had been created some detailed regulation at the level of EU with the strict observance of local regional and national customs, which make available the diversity of products and services and the economical integration.

The way of respecting these principles by the member countries is being monitor by the European Committee which draws up evaluation reports every two years, by which it held conscious the member countries about the existent problems and of the imposed solutions.

Regarding the application of these principles are aimed both individual citizens and also the economic operators. The actions are developed in two directions: one at the European Committee level, and the second one at the member countries level.

The plan of actions at the European Committee level, first of all, takes into consideration the elaboration of a Guide concerning the principle of mutual recognition in the area of industrial products and of an explanative brochure for the application of Decision no 3052/95 regarding the derogatory measures from the principle of free turnover.

The plan of actions at the member countries level, which implements in practice the principle of mutual recognition, foresees among other measure the inclusion of principle of mutual recognition in the national legislation, the strengthening of the cooperation between the national administrations from the member countries, and also the preparation of periodic reports containing the implementation problems and the possible solutions.

Beginning with 1st of January 2007, since Romania became a country member of the European Union and part of the Single Market, the custom boundaries between the member states disappeared and, as a result, there are no customs clearance (declarations) used as data source to realize the statistics regarding the intra-community trade. For replacing this data source, inside EU, instead of former customs clearance, it is used a series of additional declarations which the company have the obligation to depose regarding the intra-community transactions performed (for example, the declaration of statistics Intra-state). In this way it had been created and developed a statistic system for collecting the information directly from the companies which realize trading activities with countries member of EU. The goods which arrive into a member state are called intra-community acquisitions, and the goods which leave a state member of EU having the destination to another state member of the EU are called intra-community delivery. So, the statistics of intra-community trade is called INTRA STATE.

2. Free turnover of services. Services are of critical importance for the common internal market of EU, because they represent between 60% and 70% of the economic activity of EU-25 and approximate the same percentage in the manpower occupied by EU-25.

The principle which governs the internal market of services has been generally called "the principle of fundamental liberty" and has been regulated in the European Community Treaty. According to this principle, the companies having the headquarters in a member state hold the freedom to establish and offer services inside the area of other member countries. The principle of free turnover of services developed along the time thorough Decisions of European Court of Justice and by regulations specialized on fields, as: financial services, telecommunications, emissions and recognition of professional qualifications.

With all these regulations in the field of free turnover of services it has not been reached the level of performances at the level of turnover of goods. The Summit in Lisbon (March 2000) marked off the task for the elaboration of a strategy to eliminate the barriers which hold back the free turnover of services. It is to be noted the suppliers with services rather than big companies.

Taking into account that the small companies are upmost, in January 2004, the Committee promoted the Directive concerning the Services on the internal market of EU. This document has as objective to eliminate the discriminatory barriers, to modernize the legal and administrative frame, inclusively in the field of information technology services (IT), and to determine the member countries to cooperate more and systematically. The document consolidates in the same time the user's rights.

According to the Committee, in the last 10 years, the benefits of free turnover of services--created over 2,5 millions jobs and registered incomes over 900 billion euro. In the same time, it was noted that the competition developed, which led to an increase of quality and range of services and to the convergence of prices.

The Treaty of Romania adhesion to the European Union stipulates in Chapter 3--The free turnover of services for a period of transition of 5 years for transporting the Directive no 97/9/CE regarding the charts of compensating the investors.

So, by derogation from the article 4, paragraph (1) from the Directive no 97/9/ CE, the minimum quantum of compensation (20.000 euro) is not applied in Romania until 11th of December 2011. Romania ensures that its compensatory system for investors foresees a compensation of with a minimum value of 4.500 euro from 1st of January 2007 until 31 of December 2007, of minimum of 7.000 euro from 1st of January 2008 until 31 of December 2008, of minimum 9.000 euro from 1st of January 2009 until 31 of December 2009, of minimum 11.000 euro from 1st of January 2010 until 31 of December 2010 and of minimum 15.000 euro from 1st of January 2011 until 31 of December 2011.

3. Free turnover of capital. The principle of free turnover of capital is one of the four basic principles established by European Community Treaty (article 677) from 1957. According to the European Community the free turnover of the capital makes possible the integration, de opening, the competition and the efficiency on the financial market and of services and brings more benefits to all parties. For the citizen, the free turnover of capital means the ability to perform more operations outside the borders, respectively opening of bank accounts, to pick up shares of foreign companies, investments in the areas which bring the biggest profit and the most advantageous real estate transactions. For companies, this principle means that they have the right to invest in foreign companies and to take part in their management.

In practice, the free turnover of capital began in 1990, as a result of adoption of Directive 88/361/EEC, which foresees the elimination of control authorities of a member country over the citizens or companies of another member country who wish to invest. The free turnover of capital was set solid by adopting the Maastricht Treaty from 1993, where all restrictions regarding the free turnover of capital and payments were eliminated between the member countries, but also between the members and third countries. With this treaty it is considered that the field of free turnover of capital the legislation is complete.

After adoption of Maastricht Treaty, also other countries outside the EU area adopted the principle of free turnover of capital, even in cases when some countries requested period of transitions regarding the foreign citizens' right to buy a second house or land. The principle of free turnover of capital initiated by EU opened the way for cooperation in the area of capital policy and payments at the international level.

There are some exceptions concerning the free turnover of capital both inside the EU, and also with third countries which concern the areas of: taxes, prudent supervision, considerations of public policy, money laundering and financial sanctions which make the scope of external Policy and Common Safety. On these subjects, the Committee communicates with the national monitoring authorities to assure the correct appliance of these exceptions, and where there are misunderstandings; EU requests the support of European Court of Justice. The Committee considers necessary to monitor the activities specific to free turnover of capital in the scope of identification of eventual barriers and restrictions inside EU, and also to improve the fields which are moving slowly.

The Treaty of Romania adhesion to the European Union foreseen in Chapter 4 --Free turnover of capitals:

* a period of transition of 7 years to purchase land, forests and lads with forest by the EU citizens inside the European Economic Space (EES);

* a period of transition of 5 years for the right to purchase a property for secondary residence.

4. Electronic commerce The development of electronic commerce (e-commerce) is one of the key factors in the effort to make the EU the most competitive and dynamic economy in the world based on knowledge. The legal frame for the e-commerce inside the EU market is established by the Directive regarding the electronic commerce 2000/31/EC (COM (97) 157 final) (COM (2003) 259, the Directive regarding the electronic signature, the Directive 2002 /38/EC and the Committee Communicate (COM (1998) 374--not published in the "Official Journal") regarding the tax on electronic transactions.

The Directive 2003/31/EC regarding the electronic commerce eliminated the obstacles for free turnover of online services on the internal market of EU and it forms the legal background for businesses and consumers. The Directive establishes adjusted regulations concerning the transparency and informational requests of the suppliers of online services, commercial communications, electronic contracts and limitations of the suppliers' obligations for Internet services (ISP). The Directive covers all the category of services of the informational society, as for example: services between companies; services between companies and users; the free services supplied to users, the ones supplied for money or financed, as advertisements and the sponsored ones; services which allow electronic transactions (distant interactive sale of products and services and purchasing centers).

The areas and online activities covered by the Directive regarding the e-commerce are: online papers, data base, financial services, professional services (lawyers, medical, accountants, real estate agents), services for relaxation (video etc.), advertisement and direct advertising intermediary services (access to Internet, transmission and keeping of information).

The effective operation of e-commerce on the internal EU market is assured by the clause of the internal market, which means that services of the informational societies are, basically, subject to the regulations of member countries.

The Directive concerning the consume tax (VAT) for electronic commerce businesses abroad foresees that the imposing of these businesses is applied according to the laws in the respective country where the consume takes place, and the supply of digital products will not be considered as delivery of goods.

5. The companies' law. The adjustment of regulations concerning the management of companies, of accountancy and audit is essential to create a single market in the area of turnover of goods and financial services.

The objectives of companies' law are the shareholders' protection and of contracting parties with companies; to assure the freedom to create companies on the entire territory of EU; to institute the principle of competitiveness and efficiency in business; promotion of cooperation between different member states and simulation of dialog between the member countries with regard to the modernization of the companies' law.

The Treaty of Rome, which in 2007 makes 50 years from its conclusion, mentions the following principles:

* the companies are mutually recognized in all member countries;

* the companies created legally in a member state will not be requested for formalities by other member state, except the ones that are usually requested to national companies.

Adjustment of legislation was performed gradually, based on the specific adopted Directives.

By others action plans, the European Committee explains the necessity to elaborate some new initiatives to modernize the existent legislation or to complete it, due to the following reasons: in order to create a better internal market; to create an integrated market of capital; to maximize the benefits by applying the modern technologies which introduce the use of electronic means, as compulsory regulations when creating certain types of companies; for the success of development and to face the changes imposed by recent evolutions.

6. Public purchase. The percentage of public purchase (assets, services and public works) inside the EU is estimated to 16% of the EU PIB (approximate 1.500 billion euro in 2002). At the level of member state, the percentage is between 11% and 20% of their PIB. Taking into consideration the important value of public purchase both in the EU budget, and in the member countries one, the European funds are concerned to assure open and transparent procedures to increase the competition in the area of public purchase, in the scope of reduction of the costs paid by the governments and to increase the economies for the tax payers.

The public purchases make the object of EU regulations and international rules, but not all public purchases are the subject of these regulations. For example the purchases of military equipments for defense are excluded from these rules, but they have to observe the provisions of the international treaties in that area.

The number of Directives concerning the public purchases was approved in year 2004 by the European Parliament and has as scope to contribute to the simplification and modernization of public purchasing procedures, for example, by facilitating the electronic purchases in the public domain. The European Committee considers that the rapid implementation of the new Directive will contribute the increase of transparency in the domain of public purchases, will improve the operation of the internal market and will allow the EU to take advantage of the benefits of the enlarged internal market.

7. Right to intellectual and industrial property. Copyright and its associated rights, trade mark, the designs and patents (right to intellectual and industrial property) represent a stimulant for creation and investments in new activities destined to development of protected products (music, films, media published products, broadcastings, etc.) and contribute to the increase of competitiveness, of employment places and of innovations. Copyright is associated with important cultural aspects, social and technical which have to be taken into account when setting out the policy in this area.

The Directive concerning the right to intellectual and industrial property was adopted in 2004. In a two years period, it permitted the adjustment of national regulations of member states of the EU, so that the barriers have been reduced regarding the free turnover on the internal market of the EU and it was created the background for new forms of exploitation of the right of property.

Nowadays there are preoccupations for adopting some complementary measures:

* to consolidate the rights, as, for example, the ones regarding the access to justice, punishment of the law breakings and remediation of the prejudices;

* on the line of management and patent of intellectual rights.

Copyright is of big importance for the European Community, because it implies media, culture and industries based on knowledge. The development of industries represents the performance indicative of a post-industrial society, especially, for those pertaining to the informational society. In the year 2000, the copyright industry contributed with over 1.200 billion euro to the EU-15 economy and created an added value of 450 billion euro (5,3% of the total added value of EU-15) and 5,2 million of jobs (3,1% of the manpower occupied in the EU industry).

8. Free movement of people. The possibility to work in any country of the EU represents one of the four freedoms which characterize the single market of EU.

In the list of transition periods included in the adhesion Treaty of Romania to the European Union, is mentioned in Chapter 2--The free movement of people a period of transition of 2+3+2 years regarding the free movement of Romanian workers.

Until the end of two years period after the actual adhesion date the member countries will apply measures of internal law resulted from the bilateral agreements, which limit the access of Romanian citizens on the market of manpower from each of these countries. The actual member countries can continue to apply these measures until the expiration of a 5 years period after the adhesion date. At the end of the 5 years period, a member state can hold measures of internal law or measures which result from the bilateral agreements can continue to apply, in case when on the market of manpower from that member country has there is the risk to produce severe disturbances, also after the notification of the Committee, these measures until the end of a 7 years period from the adhesion date.

This clause is of big importance concerning the demarche of Romania to turn to profit, by competitive services, the qualities of its citizens regarding the academic and professional qualification in any member countries of the European Union.

9. The contract law. The single market offered the citizens, investors and companies the possibility to implicate in economic activities or in other activities on the area of EU in similar conditions. In case of purchasing goods or services, it is necessary to conclude a contract where are defined the conditions the transaction can take place.

The Directives adopted on the line of adjustment of legislation in the area of contracts had as scope the elimination of obstacles for the free turnover of products and services. The substantial progress had been noted in the adjustment of contract legislation in the areas of: electronic commerce, banking and insurance, right to intellectual and industrial property, consumerism and SMB policy.

Nowadays there are concerns to increase the degree of coherence of the provisions of contract laws and in other existent areas of activity or with development perspectives, the European Committee adopted an action plan in this respect.