Single market

From Wikipedia, the free encyclopedia
Jump to: navigation, search

A single market is a type of trade bloc which is composed of a free trade area (for goods) with common policies on product regulation, and freedom of movement of the factors of production (capital and 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.

A common market is a first stage towards a single market, and may be limited initially to a free trade area with relatively free movement of capital and of services, but not so advanced in reduction of the rest of the trade barriers.

The European Economic Community was the first example of a both common and single market, but it was an economic union since it had additionally a customs union.

Benefits and costs[edit]



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.[citation needed]

List of single markets[edit]




Stages of economic integration around the world:
  Common market (EEA, EFTA, CES)

Unified market[edit]

A unified market is the economic term for a single market where goods, services, capital and people can move freely without regard to national boundaries. These "four freedoms" are implemented by, among other things, removal of tariffs on the transfer of goods and services among the member nations, imposition of uniform product standards, revision of laws to permit 'market-wide' financial services, and the restructuring of most government procurement practices, so as not to favour local businesses over other member states' businesses.


  1. ^ International Trade Theory and Policy
  2. ^ Initial FTA enforced 1 January 1973 WT/REG94/R/B/1
  3. ^ Russia expects CIS countries to create free trade area
  5. ^ Member states will have to make several changes to their national laws to allow full implementation of the common market in areas such as immigration, labour and customs.

External links[edit]