Marketing91

  • HOME
  • Marketing Concepts
    • Marketing
      • Retail Tutorials
      • Market Research
      • Customer Management
    • Strategy
    • Management
    • Advertising
    • Branding
    • Business
    • Finance
    • Sales
    • Career Guidance
  • Digital Concepts
    • Blogging
    • Search Engine Optimization
    • Social Media Marketing
    • Facebook Marketing
    • Internet Marketing
    • Ecommerce
  • Brands
    • Marketing Mix of Brands
    • SWOT analysis of Brands
    • Brands Strategy Analysis
    • Business Models
    • Brand Competitors
    • TOP 10
  • Courses
Home » Economics » Common Market – Definition, History and Examples

Common Market – Definition, History and Examples

May 22, 2022 By Hitesh Bhasin Tagged With: Economics

A common market is an economic integration scenario in which member countries’ trade barriers are reduced, and their external tariffs are uniform. It is a more advanced stage of economic integration than the free trade zone and customs union, but before the economic Union.

The Common Market was a European economic community that existed from 1957 to 1993. It was created to foster economic cooperation among its member states and to reduce trade barriers. The Common Market’s members were Austria, Belgium, Denmark, France, West Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, and the United Kingdom.

Table of Contents

  • What is a Common Market?
  • Understanding Common Market
  • History of Common Markets
  • Conditions Required to be Defined as a Common Market
    • 1. Tariffs
    • 2. Free Movement of Goods
    • 3. Free Movement of Services
    • 4. Free Movement of Labor
    • 5. Free Movement of Capital
    • Common Market Characteristics
  • Common Market Advantages
  • Common Market Disadvantages
  • Examples of Common Market
    • 1. European Union (EU)
    • 2. Common Market for Eastern and Southern Africa (COMESA)
    • 3. Association of Southeast Asian Nations (ASEAN)
    • 4. North American Free Trade Agreement (NAFTA)
    • 5. Common Market of the South (MERCOSUR)
    • 6. Gulf Cooperation Council (GCC)
    • 7. East African Community (EAC)
    • 8. Southern African Development Community (SADC)
    • Conclusion!

What is a Common Market?

Definition: A common market is defined as an agreement between many countries that uses a similar external tariff. In a common market, members of the group are permitted to engage in free trade and mobility of labor and capital among one another.

The goal of the trade agreement is to offer all members of the common market enhanced economic advantages. Common markets typically involve countries that are close to one another geographically and share similar economic interests.

Understanding Common Market

A common market provides participating countries with several advantages. First, it allows for the free flow of goods and services among member nations. This increased trade results in more competition and lower prices for consumers.

Second, a common market allows for the free movement of labor and capital among member nations. This increased mobility of resources leads to the more efficient allocation of resources and greater economic growth. Finally, a common market typically results in increased political and economic cooperation among member nations. This increased cooperation can lead to more effective solutions to shared problems and a more stable international system.

In another scenario, the common market is also understood as a local food store that specializes in healthy food, and fresh and locally grown foods. They have a deli with a rotating menu of nutritious and delicious items, as well as a selection of grab-and-go options. Common Market is committed to supporting local producers and communities, and they are always interested in hearing from their customers about what they would like to see on the menu or in the store. Common Market is a great place to shop for healthy, delicious, and locally grown food.

Location in the common market is an important factor to consider when looking for support. Common Market is most likely to provide support if they are situated close to where you live. This is because Common Market wants to be able to easily reach out to its target audience and build a relationship with them. Common Market also needs to be able to easily access resources, like supplies and labor, to support their operations.

History of Common Markets

The first common market was established in 1957 by the Treaty of Rome.

The Common Market was created in order to foster economic cooperation among its member states and to reduce trade barriers.

The Common Market’s members were Austria, Belgium, Denmark, France, West Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, and the United Kingdom.

In 1967, the Common Market was expanded to include three more member states: Sweden, Finland, and Norway.

In 1973, the Common Market was further expanded to include three additional member states: Denmark, Ireland, and the United Kingdom.

In 1986, the Common Market underwent another expansion with the addition of Spain and Portugal.

In 1990-1991, East and West Germany were unified and became part of the Common Market.

In 1992-1993, the Common Market transformed into the European Union with the ratification of the Maastricht Treaty.

Conditions Required to be Defined as a Common Market

In order to be classified as a common market, the following economic integration conditions must be met-

1. Tariffs

Common external tariffs must be applied to all imports from non-member countries.

2. Free Movement of Goods

There must be the elimination of all internal tariffs and quotas on goods traded among member countries.

3. Free Movement of Services

There must be the elimination of all restrictions on the provision of services across borders.

4. Free Movement of Labor

There must be the elimination of all restrictions on the movement of workers across borders.

5. Free Movement of Capital

There must be the elimination of all restrictions on the movement of capital among member countries.

Common Market Characteristics

  1. Common external tariffs
  2. Free movement of goods, services, labor, and capital among member countries.
  3. Increased trade and economic growth
  4. Greater political and economic cooperation among members

Common Market Advantages

Common Market Advantages

  1. Free trade among member nations leads to increased competition and lower prices for consumers.
  2. The free movement of labor and capital among member nations leads to more efficient allocation of resources and greater economic growth.
  3. Common markets typically result in increased political and economic cooperation among member nations.
  4. Common markets can provide a forum for solving shared problems and a mechanism for maintaining stability in the international system.

Common Market Disadvantages

  1. Common markets can create “trade barriers” for non-member nations.
  2. Common markets can result in a “race to the bottom” in terms of environmental and labor standards.
  3. Common markets can increase the risk of “contagion” during economic crises.
  4. Common markets can centralize power within a small group of countries.

Examples of Common Market

Examples of Common Market

1. European Union (EU)

The European Union (EU) is the most well-known example of a common market. The EU has 28 member states and covers a population of over 500 million people. The EU has its own currency, the euro, and its own Parliament. The EU Common Market is based on the free movement of goods, services, capital, and labor among its member states.

2. Common Market for Eastern and Southern Africa (COMESA)

Another example of a common market is the Common Market for Eastern and Southern Africa (COMESA). COMESA was established in 1994 and has 19 member states. COMESA’s members are Angola, Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. COMESA has its own Common External Tariff (CET) and is working towards the establishment of a Common Market.

3. Association of Southeast Asian Nations (ASEAN)

The Association of Southeast Asian Nations (ASEAN) is another example of a common market. ASEAN was established in 1967 and has 10 member states. ASEAN’s members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. ASEAN does not have a single currency or a Common External Tariff. However, ASEAN does have several free trade agreements with other regional economic blocs.

4. North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) is a common market between the United States, Canada, and Mexico. NAFTA was established in 1994 and has facilitated the free movement of goods, services, and capital among its member states. NAFTA has also led to increased economic growth and investment in the region.

5. Common Market of the South (MERCOSUR)

The Common Market of the South (MERCOSUR) is a common market between Argentina, Brazil, Paraguay, Uruguay, and Venezuela. MERCOSUR was established in 1991 and has since expanded to include Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, Suriname, and Trinidad and Tobago as associate members. MERCOSUR has its own Common External Tariff and is working towards the establishment of a Common Market.

6. Gulf Cooperation Council (GCC)

The Gulf Cooperation Council (GCC) is a common market between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The GCC was established in 1981 and has since become one of the most important economic blocs in the Middle East. The GCC has its own Common External Tariff and is working towards the establishment of a Common Market.

7. East African Community (EAC)

The Common Market of the East African Community (EAC) is a common market between Burundi, Kenya, Rwanda, Tanzania, and Uganda. The EAC was established in 1967 and has since expanded to include Comoros, Djibouti, Eritrea, Ethiopia, South Sudan, and Sudan as associate members. The EAC has its own Common External Tariff and is working towards the establishment of a Common Market.

8. Southern African Development Community (SADC)

The Southern African Development Community (SADC) is a common market between Angola, Botswana, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.

The SADC was established in 1980 and has since expanded to include Comoros, Congo, the Democratic Republic of the Congo, Djibouti, Kenya, Lesotho, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, South Africa, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe as associate members. The SADC has its own Common External Tariff and is working towards the establishment of a Common Market.

Conclusion!

A common market is an economic bloc consisting of a free trade area with uniform tariffs and other trade regulations.

Common markets are intended to promote the free movement of goods, services, capital, and labor among the member states. Common markets can be found at the regional or global level. Examples of common markets include the EU Common Market, COMESA, ASEAN, NAFTA, MERCOSUR, GCC, EAC, and SADC.

Common markets have several benefits, including increased economic growth and investment, but they also have some disadvantages, such as the risk of creating monopolies. Overall, common markets are a positive step towards regional integration and cooperation.

Share this post:

Share on Facebook Share on Twitter Share on LinkedIn Share on Email Share on WhatsApp
Marketing91 Courses

Related posts:

  1. Economic Integration: Meaning, Types, & Benefits of Economic Integration
  2. Balance of Trade (BOT) – Definition, Formula and Examples
  3. Capital Resource – Definition, Importance and Examples
  4. Capital Flight – Definition, Types and Examples
  5. 12 Characteristics of Capitalism Explained
  6. Free Trade Zones: Meaning, and Top 5 Benefits of Free Trade Zones
  7. Top 8 Barriers to International Trade and their Types
  8. 4 Main Types Of Economic Systems – Different Types of economies
  9. Labor Market | Definition, Types, Characteristics, and Components
  10. What is Economic Environment? 10 Factors affecting it

What Do You Want To Learn About? (Start Here)

  1. Marketing Hub
  2. Management Hub
  3. Marketing Strategy
  4. Advertising Hub
  5. Branding Hub
  6. Market Research
  7. Small Business Marketing
  8. Sales and Selling
  9. Marketing Careers
  10. Customer Management
  11. Top 10 Lists
  1. Internet Marketing
  2. Blogging
  3. Search Engine optimization
  4. E-commerce
  5. Facebook Marketing
  6. Social Media Marketing
  7. Business Model of Brands
  8. Marketing Mix of Brands
  9. Brand Competitors
  10. Strategy of Brands
  11. SWOT of Brands
GET DAILY MARKETING UPDATES

About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement
Recent Posts
  • Channel Strategy – Definition, Creation and Types
  • Hedonic Pricing – Advantages and Disadvantages
  • Commercial Bank – Importance, Functions and Examples
  • Hard Asset – Definition, Examples, Benefits and Risks
  • Collective Responsibility – Definition, Meaning and Examples
Advertisement

Marketing91

MORE INFO

  • About Marketing91
  • Privacy Policy
  • Cookie Policy
  • Disclaimer
  • Terms of Use
  • Advertise
  • Contact us
  • Sitemap
  • ISO 9001:2015 Certified

LEARNING SERIES

  • What is Communications
  • Types of Communication

WE WRITE ON

  • Marketing
  • Small Business
  • Management
  • Internet Marketing
[email protected]

Copyright © 2022 Marketing91 All Rights Reserved