Definition of the word common market

The term "common market" originally referred to a type of economic integration between nations that went beyond the traditional free trade area. A free trade area allows for the free movement of goods between participating countries, but each nation still maintains its own external tariffs and restrictions. In contrast, a common market eliminates not only tariffs but also other barriers to the free movement of goods, services, capital, and labor. This means that goods from any member country are treated the same as domestic products, and there are no impediments to the free movement of factors of production across the borders of participating nations. The concept of a common market was first introduced in the 1957 Treaty of Rome, which established the European Economic Community (EEC) or Common Market among six European countries: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. The creation of this regional common market set the stage for the subsequent development of the European Union and the expansion of the common market concept to cover other areas, such as agriculture and services, and to include more countries in its scope.