European Single Market

The European Single Market, Internal Market or Common Market is a single market which seeks to guarantee the free movement of goods, capital, services, and labour – the 'four freedoms' – within the European Union (EU). The market encompasses the EU's 28 member states, and has been extended, with exceptions, to Iceland, Liechtenstein and Norway through the Agreement on the European Economic Area and to Switzerland through bilateral treaties. A number of potential EU accession candidates have Stabilisation and Association Agreements with the EU, which allow for limited participation in selected sectors of the Single Market, including Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia. In addition, through three individual agreements on a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, the post-Soviet countries of Georgia, Moldova and Ukraine have also been granted limited access to the Single Market in selected sectors. Turkey has access to the free movement of some goods via its membership in the European Union–Turkey Customs Union. The market is intended to be conducive to increased competition, increased specialisation, larger economies of scale, allowing goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources. It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU-wide economy. Half the trade in goods within the EU is covered by legislation harmonised by the EU. The creation of the internal market as a seamless, single market is an ongoing process, with the integration of the service industry still containing gaps. It also has an increasing international element, with the market represented as one in international trade negotiations. One of the original core objectives of the European Economic Community (EEC) was the development of a common market offering free movement of goods, service, people and capital (see below). Free movement of goods was established in principle through the customs union between its then-six member states. However the EEC struggled to enforce a single market due to the absence of strong decision-making structures. It was difficult to remove intangible barriers with mutual recognition of standards and common regulations due to protectionist attitudes. In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world, Margaret Thatcher sent Arthur Cockfield, Baron Cockfield, to the Delors Commission to take the initiative to attempt to relaunch the common market. Cockfield wrote and published a White Paper in 1985 identifying 300 measures to be addressed in order to complete a single market. The White Paper was well received and led to the adoption of the Single European Act, a treaty which reformed the decision-making mechanisms of the EEC and set a deadline of 31 December 1992 for the completion of a single market. In the end, it was launched on 1 January 1993. The new approach, pioneered at the Delors Commission, combined positive and negative integration, relying upon minimum rather than exhaustive harmonisation. Negative integration consists of prohibitions imposed on member states banning discriminatory behaviour and other restrictive practices. Positive integration consists of approximating laws and standards. Especially important (and controversial) in this respect is the adoption of harmonising legislation under Article 114 of the Treaty on the Functioning of the European Union (TFEU). The Commission also relied upon the European Court of Justice's Cassis de Dijon jurisprudence, under which member states were obliged to recognise goods which had been legally produced in another member state, unless the member state could justify the restriction by reference to a mandatory requirement. Harmonisation would only be used to overcome barriers created by trade restrictions which survived the Cassis mandatory requirements test, and to ensure essential standards where there was a risk of a race to the bottom. Thus harmonisation was largely used to ensure basic health and safety standards were met.