International cooperation and institutional choice: the European Community's internal market

TLDR

The European Community’s 1987 Single European Act set out to complete an internal market by 1992, a highly ambitious multilateral effort that imposes stronger constraints on sovereign states than other regimes and is underpinned by a legal system granting EC law supremacy and direct effect over national laws. The economic goal of completing the internal market is to eliminate a broad range of politically intractable non‑tariff trade barriers—including border controls, national standards, preferential procurement policies, and industrial subsidies. The SEA replaced unanimity voting in the EC Council of Ministers with majority voting for internal‑market matters, thereby reducing national veto power.

Abstract

The decision of the European Community (EC) members to complete their “internal market” by the end of 1992, as embodied in the 1987 Single European Act (SEA), may represent the most ambitious instance of multilateral cooperation since the construction of the post-World War II international order. The economic objective of internal market completion is the removal of a wide array of nontariff barriers to trade that elsewhere have proved politically intractable, including border controls, national standards, preferential procurement policies, and industrial subsidies. The institutional structures underpinning the internal market are more constraining on the behavior of sovereign states than has been the case for other international regimes. The SEA replaced unanimity voting (national vetoes) in the primary decision-making body of the EC, the Council of Ministers, with a system of majority voting over matters pertaining to the internal market. In addition, the internal market is buttressed by an elaborate and powerful legal system. EC law is considered to have supremacy over national laws and to have “direct effect” in domestic jurisdictions, regardless of whether it is explicitly incorporated through legislation.