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Single Market and Community’s economic foundations
According to the theory of stages of economic integration, the single (or internal) market is characterized by the abandonment of barriers which impair full competition among economies. Free trade between member countries is not only ensured by the elimination of tariffs, but also by the removal of all other obstacles (non-tariff barriers) to free trade in goods and services. Thus licenses, foreign exchange controls, customs procedures, standards and indirect taxes other than tariffs have to be harmonized or eliminated. An internal market also operates with respect to production as well as exchange and therefore freedom of mobility for labor and capital is also required. The characteristics of the single market are: customs union enhanced by freer mobility of factors of production – notably, labour, capital and services, moves towards more positive integration and fuller development of other common policies, such as competition and regional policy. [1.]
The aim to establish a single market started with the Theory of Rome. The Treaty of Rome refers to the treaty which established the European Economic Community (EEC) and was signed by France, West Germany, Italy, Belgium, the Netherlands and Luxembourg (the latter three as part of the Benelux) on March 25, 1957. Its original full name was Treaty establishing the European Economic Community. [4.] This set targets for creating a customs union and the progressive approximation of legislation, as well as for establishing the “ four freedoms” of movement for goods, services, capital and labour, all within a single regime of competition rules.
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