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Objective of a Single Market
(Internal market = Single market = common market)
Reduce and eliminate trade barriers
- Trade Barriers: tariffs & non-tariff barriers
- NTB : regulations, technical differences, fiscal barriers, quotas
- Ongoing process
White paper
on completing the internal market
- Puts forward proposals for further integration
- Identified 300 measures to remove barriers
‘Cecchini report’
provided support
- Calculating the economic benefits on the integration
- Examining the benefits and costs of creating a single market in Europe
- Weaker firms fail --> Lower costs à Lower prices
- Estimated costs of not reducing internal barriers
Advantages & Disadvantages of a single market
Advantages
- Bigger markets --> companies can specialize
- Economies of scale --> lower costs & prices
- Improved efficiency
- More attention paid to what buyers want
- Promote innovation
Disadvantages
- Monopolies may be formed.
- Loss of sovereignty
- Some industries disappear (national industries which not support the pressure of the competitiveness): Ex: National Airlines
Economic Integration
2 Ways..
- Negative integration: Eliminating regulations / barriers
- Positive integration: Harmonisation of regulations & policies
Objective of Economic Integration
reduction of barriers to trade between economies
What is a Preferential trading system?
a trading bloc that gives preferential access to certain products from the participating countries
Stages of European Integration
Free trade area/association (FTA)
Customs Union (CU)
Common Market (CM)
Economic Union (EcU)
Total Economic Union (TEcU) (Political Union)
