Is the EU dead? Not for transportation

By James Aaron Cooke -- Logistics Management, 7/1/2005

The European Union appears to be in disarray. Last month voters in France and the Netherlands rejected a revised charter for the EU, signaling that they don't share their political establishments' desire for a United States of Europe.

A federalized Europe would have an enormous impact on trade and logistics. Such tightly knit political integration would create a uniform set of regulations and laws across the continent, making it easier for companies to do business there.

But that's not likely to happen under the current process for enacting EU regulations, which Euro-federalists say is too complex and inefficient. Take transport regulation, for example.

When the EU's Transport Commission drafts a regulation, it forwards the rule for enactment to the European Parliament, which includes representatives of each member country. Transport ministers in those countries must then approve any legislation enacted by the Parliament. And there's often a second hurdle: In certain policy areas, such as taxation, member states can veto the adoption of new legislation. That's why there's no uniform EU tax on diesel fuel.

The same messy process applies to most other policy areas, a situation that prompted calls for more centralized control. Hence the revised charter, which would grant more power to the European Parliament by giving it an equal say with the Council of Ministers on certain decisions.

But the argument for a streamlined legislative process held no sway with French and Dutch voters. There were many reasons for rejection, but the main reason seems to have been that the populace prefers the current setup, with national governments having the final say in most policy areas.

Does that mean U.S. companies trading with Europe will have to contend with more national transportation and logistics regulations and laws in future? Hardly, say experts contacted for this column. A framework already exists for European countries to forge common transport regulations, they point out. "The free movement of goods was one of the key aims of the Treaty of Rome, which was the basis of the original European Common market," notes Jack Semple, an editor at Motor Transport in the United Kingdom.

The EU has already developed common truck size and weight regulations, although individual countries may adopt stricter laws. There have been uniform drivers' rules for large trucks since the 1970s. And earlier this year, the EU implemented the Road Transport Directive, which limits drivers to 60 hours of work per week.

In short, the EU will continue to move toward achieving a common transportation policy. "The new constitution would have run things in a slightly more efficient way," says Guy Willis, head of communications at the International Road Transport Union in Geneva. "In terms of decision-making mechanisms now, it will be business as usual—which is screwed up as far as transport is concerned."

When they met in June, the Council of Ministers could not agree on how to proceed on the charter. Although some pundits think the new charter—and perhaps the EU itself—is dead in the wake of the French and Dutch votes, others think political leaders will press ahead with another revision. Says Semple: "The EU Charter is dead in a way a virus can be dead. It can mutate and come back."

James Aaron Cooke, Executive Editor