Single market

Type of trade bloc with most trade barriers removed

"Common market" redirects here. Not to be confused with

European Common Market. For other uses, see Common market (disambiguation)

.

Part of a series on
World trade
Policy Import Export Balance of trade Trade law Trade pact Trade bloc Trade creation Trade diversion Export orientation Import substitution Trade finance Trade facilitation Trade route Domestic trade Tax
Restrictions Trade barriers Tariffs Non-tariff barriers Import quotas Tariff-rate quotas Import licenses Customs duties Export subsidies Technical barriers Bribery Exchange rate controls Embargo Safeguards Countervailing duties Anti-dumping duties Voluntary export restraints
History Mercantilism Protectionism Laissez-faire Free trade Economic nationalism Economic integration
Organizations International Monetary Fund International Trade Centre World Trade Organization World Customs Organization International Chamber of Commerce
Economic integration Preferential trading area Free-trade area Currency union Customs union Single market Economic union Fiscal union Customs and monetary union Economic and monetary union
Issues Intellectual property rights Smuggling Competition policy Government procurement Outsourcing Globalization Fair trade Trade justice Emissions trading Trade sanctions War Currency war Trade costs Trade war Trade and development
Lists Imports Exports Tariffs Largest consumer markets Leading trade partners
By country Trade mission Trading nation United States Argentina Pakistan Romania Vietnam India
Theory Comparative advantage Competitive advantage Heckscher–Ohlin model New trade theory Economic geography Intra-industry trade Gravity model of trade Ricardian trade theories Balassa–Samuelson effect Linder hypothesis Leontief paradox Lerner symmetry theorem Terms of trade
v t e

A single market, sometimes called common market or internal market, is a type of

labour) and of enterprise and services. The goal is that the movement of capital, labour, goods, and services between the members is as easy as within them.^[1]

The physical (borders), technical (standards) and fiscal (taxes) barriers among the member states are removed to the maximum extent possible. These barriers obstruct the freedom of movement of the four factors of production (goods, capital, services, workers).

A common market is usually referred to as the first stage towards the creation of a single market. It usually is built upon a free trade area with no tariffs for goods and relatively free movement of capital, workers and services, but not so advanced in reduction of other trade barriers.^[2]

A unified market is the last stage and ultimate goal of a single market. It requires the total free movement of goods and services, capital and people without regard to national boundaries.

Integration phases

SAFTA, USMCA)

• v
• t
• e

A common market allows for the free movement of capital and services but large amounts of trade barriers remain. It eliminates all quotas and tariffs – duties on imported goods – from trade in goods within it. However non-tariff barriers to trade remain, such as differences between the Member States' rules on product safety, packaging requirements and national administrative procedures. These prevent manufacturers from marketing the same goods in all member states.^[3] The objective of a common market is most often economic convergence and the creation of an integrated single market. It is sometimes considered as the first stage of a single market. The European Economic Community was the first large-scale example of a common market.^[a]

A single market allows for people, goods, services and capital to move around a union as freely as they do within a single country – instead of being obstructed by national borders and barriers as they were in the past. Citizens can study, live, shop, work and retire in any member state.^[4] Consumers enjoy a vast array of products from all member states and businesses have unrestricted access to more consumers. A single market is commonly described as "frontier-free".^[3] However, several barriers remain such as differences in national tax systems, differences in parts of the services sector and different requirements for e-commerce. In addition separate national markets still exist for financial services, energy and transport. Laws concerning the recognition of professional qualifications also may not be fully harmonized.^[4] The

is the only economic union whose objective is "completing the single market".

A completed, unified market usually refers to the complete removal of barriers and integration of the remaining national markets.

interstate commerce

the national government chooses to assert itself. Movement of people and goods among the states is unrestricted and without tariffs.

Benefits and costs

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this section. Unsourced material may be challenged and removed. (December 2018) (Learn how and when to remove this template message)

A single market has many benefits: with full freedom of movement for all the factors of production between the member countries, the factors of production become more efficiently allocated, further increasing productivity.^[citation needed]

For both business within the market and consumers, a single market is a competitive environment, making the existence of monopolies more difficult.^{[citation needed]} This means that inefficient companies will suffer a loss of market share and may have to close down. However, efficient firms can benefit from economies of scale, increased competitiveness and lower costs, as well as expecting profitability to increase as a result.^{[citation needed]} This is true especially for companies selling goods and services easily distributed all around the countries of single market.

Consumers are benefited by the single market in the sense that the competitive environment brings them cheaper products, more efficient providers of products and also increased choice of products and their quality.^{[citation needed]} What is more, businesses in competition will innovate to create new products; another benefit for consumers.^{[citation needed]}

Single market play significant role in increasing prosperity of nations involved in this area. For example, single market helps European Union to achieve annual growth of GDP with 2.2% p.a. between 1992 and 2006, rise in employment and job creation.

Transition to a single market can have a negative impact on some sectors of a national economy due to increased international competition. Enterprises that previously enjoyed national market protection and national subsidy (and could therefore continue in business despite falling short of international performance benchmarks) may struggle to survive against their more efficient peers, even for its traditional markets. Ultimately, if the enterprise fails to improve its organization and methods, it will fail. The consequence may be unemployment or migration.^[6]

National participation into single market opens political debates, about skills loss through worker migration from less developed countries, and wage suppression in countries to which they migrate.^{[citation needed]}

List of common markets

Every economic union and economic and monetary union includes a common market.

• 
  European Single Market (European Economic Area – Switzerland)^[7]
• Central American Common Market^{[failed verification]} (CACM)
• 
  Eurasian Economic Space
• Southern Common Market
  (Mercosur)

Proposed

• ASEAN Economic Community^[8]
  (AEC) – established, but common market integration target is 2025
• East African Community (EAC)^[9]
• African Economic Community (AEC)
• CARICOM Single Market and Economy (CSME) – Originally envisioned to be complete by 2008, it has since been delayed and is now envisioned to have free movement of people between willing member states by 2021.
• Gulf Cooperation Council (GCC) – Not yet a common market, though integration is continuing
• Latin American Integration Association (ALADI)
• Commonwealth free trade area – proposed by politicians in Australia, Canada, New Zealand and the United Kingdom but never implemented
• 
  Summit of the Americas intended to be implemented across the Western Hemisphere (excluding Cuba
  ) by 2005

References