Introduction:

Common Market can be defined as a group formed by some countries within a geographical area to
promote duty free trade and free movement of labor and capital among its members. The best example
of it is European community (as a legal entity within the framework of European Union) When the
European Common Market first came into existence, it achieved publicity among the people of whole
world. From all sides, and particularly from the United States, came an increasing flood of apprehension
concerning the effect this new Community might have on patterns of world trade. As the first
transitional steps, provided for by the Rome Treaty were put into effect, the anxiety increased that the
formation of the European Economic Community (E.E.C.) would eventually produce significant
economic and political changes.
Treaty set out that objective as follows: "The community shall have as its tasked by establishing a
common market and progressively approximating the economic policies of Member States to promote
throughout the community a harmonious development of economic activities, a continuous and balanced
expansion, an increase in stability, an accelerated raising of the standard of living and closer relationship
between the states belonging to it." It is obvious that the common market is not an end in itself, but a
means to achieve economic a political goal.
It is useful to define here the concepts of "common market" which are used almost synonymously but
which have significant nuances of meaning. The common market is a stage in the multinational
integration process, which in the words of a Court of Justice ruling, aims to remove all the barriers to
intra community trade with a view to the merger of national markets into a single market giving rise to
conditions as close as possible to a genuine internal market. It is worth nothing that the Treaty of Lisbon
ignores the concepts of the "single market" and of the "common market." It replaced the words
"common market"(of the Treaty of Nice) by the end result of the stage of the integration process, the
"internal market", which according to the Treaty on the functioning of the EU comprises an area without
international frontiers in which the free movement of goods, persons, services and capital is ensured in
accordance with the provision of the Treaties.

Economic Integration

Economic integration is a layout between different regions. An Economic Integration usually includes
the reduction or elimination of trade barriers, and the systematization of monetary and fiscal policies. To
reducing the costs for both consumers and producers are the main ambitions to Economic Integration. In
the layout of EI involves to increase the trade between various the countries. If economies become
integrated, there is a lessening of trade barriers and economic and political coordination between
countries increases. There are seven stages of economic integration: preferential trading area, free trade
area, customs union, common market, economic union, economic and monetary union, and complete
economic integration. The final stage represents a complete monetary union and fiscal policy.
Members:
The six states that founded the EEC and the other two Communities were known as the " inner six " (the
"outer seven" were those countries who formed the European Free Trade Association). The six were
France, West Germany, Italy and the three Benelux countries: Belgium, the Netherlands and
Luxembourg. The first enlargement was in 1973, with the accession of Denmark, Ireland and the United
Kingdom. Greece, Spain and Portugal joined in the 1980s. The former East Germany became part of the
EEC upon German reunification in 1990. Following the creation of the EU in 1993, it has enlarged to
include an additional sixteen countries by 2013.
Member states are represented in some form in each institution. The Council is also composed of one
national minister who represents their national government. Each state also has a right to one European
Commissioner each, although in the European Commission they are not supposed to represent their
national interest but that of the Community. Prior to 2004, the larger members (France, Germany, Italy
and the United Kingdom) have had two Commissioners. In the European Parliament, members are
allocated a set number seats related to their population, however these (since 1979) have been directly
elected and they sit according to political allegiance, not national origin. Most other institutions,
including the European Court of Justice, have some form of national division of its members.

How European Common Market is related with Economic Integration:

The EU policy significantly reduce in bounds rates for major rising markets so what the EU seeks is
discipline to prevent the emerging markets increasing rates on EU exports. The EU has offered free
tariff, free quota, free access to the EU market for the least developed countries and major WTO
members. The average EU tariff is 15% in agriculture, compared to 10% in Brazil and china and 38% in
India, but the EU of course provides significant agricultural subsidies.

●Trade creation: For Economic Integration, trade is stimulated as a result of free access to markets.
●Exploitation of economies: Their markets are expanding for the exploitation of economies of scale
by local firms as lower production costs
●Lower costs: Economic Integration’s main aim to lower cost and as a result of lower costs increased
competition.
●Information failure: By reducing information failure which allowing consumers to make more
rational choices.
●Increased investment: Day by day technology transfer as a result of increased investment flows
between members.
●Labor mobility: Increased labor mobility enabling wage costs to converge, and unemployment to be
spread more evenly between members.
●Capital mobility: Increased capital mobility which increases its relative supply in each country, and
enables businesses to grow and innovate.
●Remittance: Increased remittance flows between worker’s resident in one country and families
remaining in another country.
●Co-operation on common projects of mutual benefit, such as green energy research.
●Enables jointly produced goods which members might not be able to fund on their own, such as
Europe's Airbus consortium.
That’s why European Common Market is related with Economic Integration.

History:

March 25, 1957, France, West Germany, Italy, the Netherlands, Belgium, and Luxembourg sign a treaty
in Rome establishing the European Economic Community (EEC), also known as the Common Market.
By 1950, it was apparent that centuries of Western European world supremacy were at an end. The
national markets of Europe, isolated from each other by archaic trade laws, were no match for the giant
market enjoyed by the United States. And looming over Europe from the east was the Soviet Union,
whose communist leaders commanded vast territory and economic resources under a single system.
As a means of improving Europe’s economic climate and preventing war, some influential statesman
and political theorists suggested economic integration. The first major step in this direction was taken in
1951, when France and West Germany formed the European Coal and Steel Community (ECSC),
integrating their coal and steel industries. French leaders proposed the organization primarily as a means
of monitoring German industry, and West German leaders immediately agreed, to allay fears of German
militarization. To supervise the ECSC, several supranational bodies were established, including an
executive authority, a council of ministers, an advisory assembly, and a court of justice to settle disputes.
Italy and the three nations of the Benelux Economic Union–Belgium, the Netherlands, and
Luxembourg–soon joined. The groundwork for the EEC was laid.
On March 25, 1957, representatives of six European nations signed two treaties in Rome. One created
the European Atomic Energy Community (Erratum) for the common and peaceful development of
Europe’s nuclear resources. The other created the EEC. In the Common Market, trade barriers between
member nations were gradually eliminated, and common policies regarding transportation, agriculture,
and economic relations with nonmember countries were implemented. Eventually, labor and capital
were permitted to move freely within the boundaries of the community. The EEC, the ECSC, and
Erratum were served by a single council of ministers, representative assembly, and court of justice. In
1967, the three organizations were fully merged as the European Community (EC).
Britain and other European nations initially declined to join the Common Market and established the
weaker European Free Trade Association (EFTA) in 1960 as an alternative. By the early 1960s,
however, the Common Market nations showed signs of significant economic growth, and Britain
changed its mind. Because of its close ties to the United States, however, French President Charles de
Gaulle twice vetoed British admission, and Britain did not join the EC until January 1973, when Ireland
and Denmark also became EC members. Greece joined in 1981, Portugal and Spain in 1986, and the
former East Germany as part of reunified Germany in 1990.
In early 1990s, the European Community became the basis for the European Union (EU), which was
established in 1993 following ratification of the Maastricht Treaty. The treaty called for a strengthened
European parliament, the creation of a central European bank and common currency, and a common
defense policy. In addition to a single European common market, member states would also participate
in a larger common market, called the European Economic Area. Austria, Finland, and Sweden became
members of the EU in 1995. As of early 2007, there were twenty-seven member states in total, and
further growth was expected.

Policy of European Common Market

Policies and procedures are an essential component of any organization. Policies are important because
they address pertinent issues, such as what constitutes acceptable behavior by employees.
EU policies are broadly divided into internal (common) policies and external policies.

Internal policies
The internal policies are also known as common policies. They are:

●Agricultural policy:
The main objective of Europe's agricultural policy is to develop the countryside. The European Union
wants to ensure agricultural product in all parts of Europe. The quality of food, package labelling and
plant protection are controlled.

●Food safety:
The objective is to ensure that the products produced in the various parts of Europe are safe, clean and of
high quality and grown with due respect for the environment. Efficient regulation limits over-production
but ensures the capacity to increase production whenever necessary.

●Employment policy
Employment policy plays an important part in the European Union’s strategy. As a result of the
economic recession and developments in the world trade, unemployment has increased in Europe. The
European Union seeks to keep the jobs in Europe and help the unemployed to find work. Investments
are made in education and research.

External Policies are focused on political co-operation between member states on issues such as:

●Enlargement of the EU
●Aid and humanitarian assistance
●Trade and external relations with countries outside the EU
●Promotion of peace, democracy and stability beyond the EU's borders.
Objective of the ECM:

European’s most comprehensive attempt of economic integration was marked by the formation of the
European Economic Community (EEC). The aim of the common market is to form a customs union of
the six countries. The six countries of Western Europe are France, German, Italy, Belgium, Netherlands
and Luxembourg. This country agreed to merge their separate economies into one single economic unit
by establishing a common market' area which is known as the 'Inner Six' arrangement. In a treaty signed
in Rome on March 24,1957, This six country arrangement for the creation of a common market's area is
popularly known as the European Common Market (ECM).

The another objectives of the European Common Market are as follows:

●The first objective is compilation of the internal market of the 6 countries of EC/EU.
●Free movement of the goods among the countries of EU.
●Public procurement in the EU.
●Free movement of the workers in the EU. So that worker may get better wages from other country.
●Freedom of establishment and recognition of qualifications in the EU.
●Freedom of provide services in the EU.
●Free movement of the capital of EU. For this one country can transfer capital from one country to
another country.
●Trans-European Networks in the EU.

Function:

The main function of ECM are bellowing:

●The removal of customs duties and import-export quotas between each other.
●The establishment of a common tariff and commercial policy for the outside nations.
●The abolition within the community of obstacles to the free movement of labor and capital.
●The inauguration of common agricultural and transport policies
●The establishment of a system ensuring competition in the Common Market
●The adoption of procedures for co-ordination of the economic policies of member nations and for
●remedying their balance of payments disequilibrium. Basic goals in the co-ordination process include
external balance, full employment and price stability.
●The co-ordination of legislation of member states for the smooth functioning of the common market.
●The establishment of a European Social Fund for easing the readjustment problem of workers
experiencing unemployment as a consequences of trade liberalization.
●The creation of a European Investment Fund which will give financial aid to the industrialists to
improve workers' conditions in the underdeveloped regions of the component states. Another purpose of
such a fund is to help in financing projects of European importance.
●The association of dependent overseas territories within the economic community. Hence the Overseas
Development Fund was also established in 1958, empowered to provide loans for projects in the
affiliated overseas territories.

Conclusion:

EU trade policy has gone through various stages, some more defensive than others. During the 1980s
and 1990s the EU moved to become more supportive of a liberal rules based multilateral trading
order.EU efforts to lead a comprehensive WTO round, in the shape of the DDA during the 2000s, has
not had much success. As a result, the EU has retrieved to perishing bilateral free trade agreements in
order to pursue its aims.
The EU policy stance remains generally liberal, with the exception of agriculture where reform has been
steady but slow, and there is unlikely to be support among a qualified majority of member states for any
move towards the more aggressive use of reciprocity by threatening to close the EU market. But the EU
lacks much leverage in negotiations, especially multilateral negotiations, due to the fact that it has an
open market in most sectors, again with the exception of agriculture. The negotiation coinage that could
be offered by way of opening the EU agricultural market did not prove sufficient to make progress on
the EU's offensive interests in the DDA.
The decision making procedures of the EU have functioned tolerably well up to now thanks member
states having confidence and trust in the way decisions are made and the way the commission, as agent,
is controlled. The need to integrate the EP into the decision making procedures following the Lisbon
(TFEU) Treaty is however, likely to result in a period of uncertainty.

References:

●www.europedia.mousis.eu/books/Book_2/316/indextkl?all
●www.history.com/this_day-in history/common-market-founded.
●http://en.wikipedia.org/wiki/European-Economic_Community.
●www.yourarticle library.com/trade-2/eec-european-economic-community-nature-objectives-and-its-
economic-impact/26286/
●http://www.enotes.com/homewark-help/what-was-background-objectives-function-european-21982/
●http://ecas.europa.eu/headquarters-homepage_en/926/Bangladesh and the EU.
●https://www.economicsonline.co.uk/Global_economics/Single_markets.html