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‘Mutual Recognition’ or ‘Mutual Evaluation’? Dealing with ‘Behind the Borders’ Barriers to Market Integration

As economic integration continues to deepen across developed economies the barriers to further integration are revealed as those located behind rather than at the borders of integrating states. A concept that has, correspondingly, acquired increasing popularity in recent years is that of ‘mutual recognition.’ This concept is regarded by many as a way of furthering economic integration in sectors in which identified obstacles to integration are regarded as limiting productivity and economic development. Using the European Services Directive1 as a case study, this article examines the concept of mutual recognition in order to better understand its limitations as well as its potential. It is suggested that the more significant innovation in the Directive is the process of ‘mutual evaluation’ introduced by the Directive in Article 39. Once again, the EU may be leading the way in dealing with barriers to trade.