Britain must brush up on rules

THE great single market project, launched by Commissioner Lord Cockfield and nurtured by Lady Thatcher, is nearly complete.

The latest progress report shows most European Union member states are on track to meet implementation targets - 98.5% of the 1,490 directives setting market-opening safety and environmental standards - by the Barcelona summit in March.

Curiously, it is the greatest champion of the process, Britain, whose reputation is looking battered. After a sterling start, it has made less progress than seven other members in putting the directives into national law over the past six months. And, in a blow to the conventional wisdom we implement the rules while others do not, Britain is now fourth worst of all 15 members.

The Greeks and the French tie for the wooden spoon in failing to implement 3% of the agreed rules; Austria comes next with 2.9% then Britain on 2.8%. Five states have already met their targets.

The second blow to the national self-image comes in a special Gallup poll for the EU Commission that asks about the quality of the regulatory environment in each member state.

Overall, business people find Finland the easiest country to trade with, while Britain is the most difficult (closely followed by Italy). In nearly 7% of cases, the regulatory environment was found to be so difficult in one member state or another that companies decided to reduce or stop trading there altogether.

The UK also has the smallest proportion of companies (37%) that believe their authorities show common sense in enforcing laws. And British companies estimated savings in compliance costs could amount to 19% if legislation were of better quality - the third-highest finding of any member state.

The main complaint in Britain concerns conformity with product standards. Businesses also want to be consulted more about the real world constraints before regulators rush to the rule book, a moral the commission would have done well to heed in its recent proposed directives in the financial services area.

As it notes: 'Regulation is an activity that carries a cost, which should be more than offset by the benefits.' Yet the Commission does not always undertake a regulatory impact assessment of its proposals.

Where Britain still scores relatively highly - perhaps a tribute to the same dogged official diligence that persecutes business people - is in respecting the rules once they are enacted.

The number of single market infringement cases taken by the Commission against all member states is nearly 1,500, the worst offenders being France with 224 and Italy, 192. Britain has the best record of the big guns - but is still outdone by six of its 15 partners, with the Finns again in pole position.

Ill fitting

THE decision by the European Court of Justice to back Levi Strauss against Tesco is a blow to British and other European consumers. Tesco was offering Levi 501 jeans, bought from the United States, for just a little more than half the £50 cost in approved department-store outlets. It will have to think again.

The court upheld the right of trademark owners to determine the conditions of sale of their products within the EU. If products could be bought cheaply elsewhere in the union, then a supermarket could do so. But Levi Strauss was entitled to control first marketing within the EU - including imports - to build its brand.

This allows Levi Strauss to use its trademark protection to charge much higher prices in Europe (where Levis are a premium product) than in the US (where they are a basic).

I can't believe the intention of the trademark directive was to allow companies to segment their markets like this (providing that they don't segment the EU market). Clearly, designer brands need trademark protection to encourage investment in their exclusivity. But what about free trade and equity? Commissioner Frits Bolkestein needs to have a new look at the legislation and quickly come up with some revisions.

Chris Huhne, Liberal Democrat MEP for South-East England, is a member of the European Parliament's economic and monetary affairs committee.