key term - Common Market

Definition

A Common Market is a type of trade bloc that allows for the free movement of goods, services, capital, and labor among member countries, fostering economic integration and cooperation. This concept is crucial in understanding the evolution of European integration, as it laid the groundwork for the later formation of the European Union and contributed significantly to the rebuilding efforts in Europe following World War II.

5 Must Know Facts For Your Next Test

1. The Common Market was established by the Treaty of Rome in 1957 and initially included six founding members: Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany.
2. It aimed to create a customs union by eliminating tariffs on goods traded between member countries and promoting economic collaboration.
3. The Common Market played a pivotal role in stabilizing European economies after World War II, fostering recovery and growth through increased trade.
4. Over time, the Common Market evolved into the European Union, which expanded its scope to include political and social integration alongside economic cooperation.
5. The principles of the Common Market continue to influence current EU policies, emphasizing the importance of a unified market for economic prosperity in Europe.

Review Questions

• How did the establishment of the Common Market impact economic recovery in post-World War II Europe?
  • The establishment of the Common Market was vital for economic recovery in post-World War II Europe as it facilitated free trade among member countries by eliminating tariffs and other trade barriers. This increased trade led to greater economic cooperation and integration, allowing nations to rebuild their economies more effectively. By fostering a sense of unity and collaboration, the Common Market helped stabilize the region and reduce tensions that had contributed to earlier conflicts.
• Evaluate the relationship between the Common Market and the formation of the European Union in terms of economic and political integration.
  • The Common Market laid the foundational framework for what would eventually become the European Union by promoting not just economic but also political integration among its member states. As countries recognized the benefits of working together economically through reduced barriers to trade and increased cooperation, they began to seek deeper collaboration. This evolution led to treaties that expanded upon economic ties, ultimately resulting in a more politically integrated Europe with shared policies and governance structures within the EU.
• Discuss how the principles of the Common Market continue to shape contemporary European policies and its significance in global trade.
  • The principles established by the Common Market are still central to contemporary European policies, emphasizing free movement and economic cooperation among EU member states. These principles have not only fostered an integrated single market within Europe but have also positioned the EU as a significant player in global trade. By promoting trade liberalization and regulatory harmonization among its members, the Common Market has contributed to Europe's ability to negotiate as a unified entity in international trade agreements, showcasing its importance beyond regional boundaries.

Related terms

European Economic Community (EEC):

An organization created by the Treaty of Rome in 1957 to promote economic integration among its member states, serving as a precursor to the European Union.

Tariff: A tax imposed on imported goods, which can hinder free trade; common markets typically aim to eliminate tariffs between member countries.

Single Market: An advanced form of economic integration that not only includes the free movement of goods and services but also aims to standardize regulations and policies across member states.