European single market

The European single market, also known as the European internal market or the European common market, is the single market comprising mainly the 27 member states of the European Union (EU). With certain exceptions, it also comprises Iceland, Liechtenstein, Norway (through the Agreement on the European Economic Area), and Switzerland (through sectoral treaties). The single market seeks to guarantee the free movement of goods, capital, services, and people, known collectively as the "four freedoms". This is achieved through common rules and standards that all participating states are legally committed to follow.

Any potential EU accession candidates are required to make association agreements with the EU during the negotiation, which must be implemented prior to accession. In addition, through three individual agreements on a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, 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 United Kingdom left the European single market on 31 December 2020. An agreement was reached between the UK Government and European Commission to align Northern Ireland on rules for goods with the European single market, to maintain an open border on the island of Ireland.

The market is intended to increase competition, labour specialisation, and 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. The creation of the internal market as a seamless, single market – which the Commission consider to be "one of the European Union's most significant achievements" – is also an ongoing process, with the integration of the service industry still containing gaps. According to a 2019 estimate, because of the single market the GDP of member countries is on average 9 percent higher than it would be if tariff and non-tariff restrictions were in place.

One of the core objectives of the European Economic Community (EEC) upon its establishment in 1957 was the development of a common market offering free movement of goods, service, people and capital. 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. Because of protectionist attitudes, it was difficult to replace intangible barriers with mutually recognized standards and common regulations.

In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world, Margaret Thatcher sent Lord 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.