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EU to Forge Single Market for Defense Industry
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The European Commission (EC), the executive of the European Union (EU), on Monday issued a public consultation with a view to moving up a gear on forging a single market for defense industry.

"Opening the internal market for defense products would boost our economy and increase the competitiveness of the European defence-producing companies," said EC vice-president Gunter Verheugen.

One option could be to propose a new legal instrument "for lifting obstacles to trade within the EU thanks to the coordination of export rules concerning armaments."

The EU arms industry is worth € 70 billion (about US$84 billion) and employs 770000 people across Europe.

However, the creation of a single market of defence equipment has been hampered by national red tape and administrative hurdles to trade.

EU member states are traditionally reluctant to hand over any defence role to the EU.

And EU internal market exemptions have justified restrictive national measures to free movement on the ground of national security.

But the commission considers exemptions do not overlap on Brussels legislative power to enable the smooth functioning of the internal market.

"Defence sector is sensitive in member states but the case law of the European court of justice shows that the principle of free movement also applies to defence," said an EC spokesman.

The European Defence Agency last November adopted a code of conduct designed to boost cross-border competition.

The EC believes that a free defence market will secure military supply within the EU and provide guarantees for the protection of national security.

Traceability and certification of defence-producing companies will be organized at EU level to ensure re-exports to third countries are regulated.

The EC said it aims to define guidelines for a general communication on the defence industry by the end of 2006.

(Xinhua News Agency April 4, 2006)

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