The most important ingredients of a Single Market: The EU Prospect

The most important element of a single market creation is the exploitation of its economic aspects. In terms of the European Union (EU), the Single Market entity gives it all the necessary ingredients to make a unique world-class economic association, in which you can find both border-separated states and common-market definitions.

   The Single Market provides access to European Union markets through three broad elements: a) it removes tariffs and quotas on goods trade within the EU, b) it creates a customs union within the EU (common external tariff for goods arriving from outside it, and allows for the removal of costly, complex and time-consuming customs controls within the EU), and c) it creates a level playing field by reducing non-tariff and other barriers to trade within the EU.

   Tariff-free trade means that there are no duties charged on trade between the member states. If a business based outside the EU wants to sell its goods into the EU, then it needs to pay applicable import duties to be able to do so. In general, import tariffs are used across the world.

   The average tariff rate World Trade Organization (WTO) members apply to imports of countries with which there is no preferential agreement is 9%. Hence, by removing the internal tariffs on trade within the EU, the countries can compete with goods from all other EU countries on a level playing field, and consumers can buy a much wider range of goods from other EU countries at lower prices.

   The above situation makes internal trade cheaper and less bureaucratic. It removes costly and time-consuming processes, since there is no need for further trade-related complex procedures. For instance, about the so-called "Rules of Origin". The OECD has estimated that crossing the border, documentation and other delays can increase the transaction costs of trade by up to 24% of the value of traded goods.

   The EU has also developed a level playing field for trade and investment by removing other barriers to free trade such as differing regulations or technical specifications for goods, known as "non-tariff barriers". These impose hidden costs on businesses that want to trade across borders. There are a huge range of these barriers, from requirements for additional documentation, to differing technical requirements on products, packaging and labelling requirements, recognition of qualifications in services, and numerous others. Reducing these barriers means developing common technical requirements across the EU.

   Ensuring that type of consistency means that firms can supply a single product for sale throughout the whole of the Single Market, rather than needing to make different products for each of EU countries. Where goods have been certified as compliant for a state, they will automatically be compliant for sale across the whole of the EU. The same principle can be applied to services.

   The Schengen border-free area is the area within which passport and other border controls have been abolished. The depth and breadth of the Single Market is particularly important to the members. The withdrawal of a Single Market, or the reduced access to it, would make a country less attractive destination for foreign investments.

   The competition rules of the Single Market and the EU law mean that markets are undistorted by anti-competitive practices and work fairly for consumers and society. The Single Market also provides a guaranteed right to access and deliver services in the same way as any domestic firm in every EU country. This level playing field for trade in goods and to some extent services within the EU, makes a unique entity in which different countries can exploit their competitive advantages, under the same conditions.