Completing the Internal Market in Services: 6th Report of Session 2005-06 Report with Evidence : House of Lords Papers 23 2005-06

Trade in services across the EU remains subject to a large number of restrictions, limiting choice for consumers and businesses, holding back growth, output and employment. The Commission has proposed a Directive which seeks to encourage greater cross-border trade in services by providing a legal framework that will eliminate obstacles to: the freedom for service providers to establish their business in any Member State; and the free movement of services between Member States. This report concentrates on the free movement of services between Member States. Under the Country of Origin Principle, a business which provides services in the Member State in which it is established is qualified to provide services on a temporary basis in any other Member State according to the regulations of its home Member State. Despite a substantial number of exceptions to the application of the Principle, the Directive has been criticised. The Committee, though, finds that the draft Services Directive does not pose a threat to the health and safety of employees or consumers, nor to environmental standards, nor to consumer protection. Services of general economic interest should not be excluded from the Directive. The draft Directive offers opportunities for small businesses in all 25 Member States of the European Union. The Services Directive is essential to remove unnecessary and unjustified obstacles to trade and to flexible markets thereby making the European Union more competitive in a global economy.