What is a Common Market?
A common market is an economic arrangement that allows the free movement of goods, services, capital, and labour between participating countries. It is a form of economic integration that is more advanced than a free trade area and is often seen as a step towards the creation of a customs union and, ultimately, a single market. Common markets are designed to break down the economic barriers between member countries, allowing for increased trade and investment. This, in turn, can lead to increased economic growth, greater competition, and lower prices for consumers.
Examples of Common Markets
One of the most well-known common markets is the European Common Market, also known as the European Economic Community (EEC). This was formed in 1957 and was the predecessor to the European Union (EU). The EEC allowed for the free movement of goods, services, capital, and labour between the member countries. The Southern African Development Community (SADC) also has a common market. This common market was established in 1980 and currently consists of 15 countries. The common market has eliminated tariffs and other trade barriers, allowing for increased trade and investment between member countries.
Benefits of Common Markets
Common markets can provide several benefits to the participating countries. These include:
- Increased trade and investment between member countries.
- Increased competition, which can lead to lower prices for consumers.
- Faster economic growth.
- Greater access to foreign markets for businesses.
- More jobs and higher wages.
- A more unified foreign policy.
Common markets can also help to reduce poverty and inequality between member countries by providing access to more resources and opportunities.
Conclusion
Common markets are an important form of economic integration that can bring about increased trade, investment, and economic growth. By eliminating trade barriers and allowing for increased movement of goods, services, capital, and labour, common markets can provide many benefits to the participating countries. For more information, please visit: