Brussels to push EU-wide standards for services

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The European Commission will unveil plans on Wednesday (1 June) to introduce EU-wide standards for the provision of "all services" ranging from tourism to logistics, according to draft proposals seen by EurActiv.

The new regulation, to be presented on Wednesday by Industry Commissioner Antonio Tajani, is designed to enable "the Commission to issue mandates requesting the development of European service standards," reads the draft legislative proposal.

The move confirms previous Commission announcements made in April as part of the Single Market Act relaunch and would complement the Commission's current rule-setting powers on manufactured goods.

"All services will be included in the scope of the regulation," a Commission official told EurActiv after an extraordinary meeting of the commissioners' heads of cabinets, held yesterday (30 May).

"The regulation will allow the Commission to intervene in standards ranging from tourism to green economy services," explained the high-ranking official.

"Even liberal professions, such as legal services or engineering consultancies, fall under the scope of the regulation, which could go as far as imposing standards on tariffs," the official went on.

Proliferation of national standards

Brussels argues that standards are key enablers of economic development because they push the industry to develop compatible products and reduce uncertainty over investments.

The European standard for mobile phones, the GSM, is often cited to show how EU standard-making can enable growth in some consumer markets. When the GSM standard went global, European firms like Nokia gained a competitive edge over their US and Asian rivals and made billions of euros in profits.

Now the Commission wants to replicate the same success by expanding its standardisation power to the services sector, which represents around three-quarters of the EU's gross domestic product (GDP).

In recent years, EU regulators have already established pan-European standards in transport, logistics, postal services and electronic communications networks.

However "progress in the development of European standards for services has been slow and recent years have seen the rapid growth in service standards at the national rather than the European level," says the Commission, with "453 new national standards in 2005-2009, as opposed to only 24 European".

"This proliferation of national standards risks creating barriers to intra‑EU trade in services by requiring businesses to adapt to a range of different national standards within the single market," adds the communication accompanying the draft regulation.

Industry concerns

To address this, the Commission is proposing to expand its power to decide upon common standards, although the documents underline that these should always be "market-driven", "consensus-based" and mainly "voluntary".

Indeed, when a standard is proposed by a European standardisation body and has wide backing, it is going to be more difficult for individual firms to oppose it without isolating themselves.

However, the Commission's approach has already provoked an outcry among European companies, which argue that consumers should ultimately decide which product or services best meets their needs.

Many businesses fear a spree of regulation which could ultimately affect the market. Small and medium-sized enterprises (SMEs), which loudly criticised the Commission's approach, will have another reason to complain since the original text was changed at the last minute to scrap their voting rights on deciding standards.

According to the current draft, approved by the Commission yesterday, only representatives of the 27 EU member states will have the opportunity to voice their opinion.

A review, to be conducted in 2013, "will examine if voting rights should be granted for selected European organisations representing SME and societal stakeholders," it says.

The first draft instead read: "The position of European Associations representing SMEs and societal stakeholders should be strengthened, including the granting of voting rights to these groups."

Positions: 

Stephen Russell, secretary-general of ANEC, the European consumer group on standardisation, said that barriers to consumer participation in standards-setting needed to be dismantled.

"Standards affect us every day and everywhere. For consumers, standards are important as, when they are properly developed and applied, they can make life easier [and] the products we buy safer, interoperable and accessible to people of all ages and abilities," he said.

"It is therefore essential that the association representing consumers in standardisation is provided with the means to contribute effectively to the standardisation system to promote the welfare of European citizens, as well as continuing to aid European trade and competitiveness," Russell added. 

"The introduction of European standards to all types of services has the potential to transform the supply and consumption of services across Europe," according to John Bryson, professor of enterprise at the University of Birmingham.

Bryson, a member of DG Industry and Enterprise's expert panel on service innovation, added: "The introduction of appropriate standards to services will enhance transparency in the market for consumers and also has the potential to encourage innovation that should enhance service exports. The introduction of standards to services should be welcomed as an opportunity to enhance the quality of services that are available throughout Europe."

"Standardisation should not be considered as a threat, as the setting of standards is market-driven and consensus-based. It is important that service standardisation is also considered for services that are embedded in physical goods."

"The distinction between services and goods is becoming increasingly blurred as companies create hybrid products that blend manufacturing and services together in innovative ways. These new hybrid products are the future for European competitiveness and should be encouraged through the development of appropriate standards," Bryson concluded.

Timeline: 
  • 1 Jan. 2013: New regulation to start applying across the EU (draft date).
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