Define: Common Market

A common market is a type of economic integration where member countries agree to remove trade barriers, such as tariffs and quotas, and allow the free movement of goods, services, capital, and labour within the market.

While both a common market and a free trade area aim to promote trade among member countries, a common market goes a step further by allowing the free movement of factors of production, such as labour and capital, in addition to goods and services.

Being part of a common market can lead to increased trade, economic growth, and job creation. It allows businesses to access a larger market, benefit from economies of scale, and attract foreign investment. Consumers also benefit from a wider range of products and services at competitive prices.

Some potential disadvantages include increased competition for domestic industries, loss of control over trade policies, and the need to comply with common market regulations and standards. Additionally, certain sectors or regions within a country may experience negative effects, such as job displacement.

A common market typically allows for the free movement of labour, meaning citizens of member countries can live and work in any other member country without the need for work permits or visas. However, each country may still have certain restrictions or requirements in place, such as registration or documentation procedures.

Yes, a country can choose to leave a common market. However, the process and consequences of leaving will depend on the specific agreements and treaties in place. It may involve renegotiating trade terms, establishing new trade barriers, and potentially facing economic disruptions.

Disputes within a common market are typically resolved through negotiation and consultation between member countries. In some cases, there may be a designated dispute settlement mechanism, such as a regional court or arbitration panel, to handle more complex or contentious issues.

While a common market can have its own currency, it is not a requirement. Some common markets, such as the European Union, have adopted a common currency (e.g., the Euro), while others, like the Common Market of the South (Mercosur), have not.

Yes, there are several common markets in existence today. Examples include the European Union, the Eurasian Economic Union, the Southern African Customs Union, and the Gulf Cooperation Council.