BRUSSELS, Feb 6: A European Union state may only ban goods from another EU member under very strict conditions, according to rules being proposed next week to stamp out protectionism in the bloc's market for goods.

The draft rules, obtained by Reuters, could spark clashes with states who want to shield some of their companies from too much cross-border competition, even though the free movement of goods is part of the bloc's founding treaty.

But EU Industry Commissioner Guenter Verheugen has vowed not to allow states to use domestic technical standards as barriers to goods from another EU state.

The trading volume in major sectors, such as household appliances, construction materials, medical devices and lifts, is estimated to be worth more than 1.5 trillion euros in the EU.

Verheugen has said trade would grow more, particularly among smaller companies, if barriers were dismantled.

"This directive is badly needed. Never underestimate the capacity of national administrators to prevent the entry of goods," said Alexander Stubb, a centre-right Finnish member of the European Parliament who is expected to sponsor the rules in the EU assembly.

The proposal aims to ensure that goods lawfully sold in one member state can be sold anywhere else in the EU, a fundamental principle known as mutual recognition.

"The directive concentrates in particular on the burden of proof by setting out the procedural requirements for denying mutual recognition," the draft said.

Mutual recognition, backed by the famous Cassis de Dijon ruling in the European Court of Justice, is an alternative to harmonising goods, a more time-consuming step. The rules forsee creating a website listing goods that should be able to move freely around the EU. The rules will apply to any industrially manufactured or agricultural product, including fish products, lawfully marketed in another member state.

To ban a product, a state would need to give "sufficient technical and scientific evidence" to show this was justified in the public interest.—Reuters