Common market is an economic union of nations. Members of a common market work to eliminate tariffs and other trade barriers among themselves and to follow a uniform trade policy with nonmember countries. The members also work to achieve free movement of workers and financial capital from one member nation to another.
Nations form common markets to stimulate industrial growth and efficiency, to increase employment, and to make more and cheaper goods and services available to consumers. The European Union is an example of a common market. For more information on how a common market operates, see European Union (EU).
Some groups of countries have partially or completely removed trade barriers among themselves. However, they are not true common markets because each member maintains its own trade policies with nonmember countries, and workers and capital do not move freely among the members. These groups—or the agreements that have established them—include:
Association of Southeast Asian Nations
(ASEAN). Founded: 1967. Members: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. See Association of Southeast Asian Nations.
Australia-New Zealand Closer Economic Relations Trade Agreement.
Went into effect: 1983. Parties: Australia and New Zealand.
Dominican Republic-Central America-United States Free Trade Agreement
(CAFTA-DR). Went into effect: 2006. Members: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States.
Eurasian Economic Union
(EEU). Founded: 2015. Members: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
European Economic Area
(EEA). Founded: 1994. Members: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
European Free Trade Association
(EFTA). Founded: 1960. Members: Iceland, Liechtenstein, Norway, and Switzerland. See European Free Trade Association.
Mercosur.
Founded: 1991. Members: Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Associate members: Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. Venezuela’s membership has been suspended since 2016. See Mercosur.
United States-Mexico-Canada Agreement
(USMCA). Went into effect: 2020. Parties: Canada, Mexico, and the United States. See United States-Mexico-Canada Agreement.
See also Andean Community.
