Enabling free movement but restricting domestic policy space? The price of mutual recognition

Free movement of goods within the EU is guaranteed via mutual recognition: any product lawfully produced in one member state must also be accepted in all other member states. While unleashing economic benefits from trade without regulatory barriers, mutual recognition potentially limits member states' ability to address societal concerns with regard to production conditions. This hypothesis is addressed via the case of farm animal welfare in Germany, combining a thorough policy analysis with 20 elite interviews. The results demonstrate how the discourse of inner-European competition has discouraged policymakers to adopt stricter legislation over the past three decades, exemplifying the impeding effect of mutual recognition on member states' policies. Understanding these mechanisms is vital for handling regulatory diversity within integrated markets and offers insights into similar policy areas. This research contributes to the broader issue of national sustainability standards in a globalized world, where collective preferences increasingly collide with economic goals.