An agreement among a group of countries to eliminate trade barriers among themselves, to present a common trading front to the rest of the world in terms of common barriers to trade, and to permit free movement of factors of production among member countries is called a

Question

Quizplus · Accepted Answer

A common market refers to an agreement among a group of countries to eliminate trade barriers among themselves and to present a common trading front to the rest of the world in terms of common barriers to trade. Additionally, a common market permits free movement of factors of production among member countries, meaning that labor and capital can move freely within the market. This is a step beyond a free-trade area or customs union, which may eliminate tariffs but do not allow for free movement of factors of production. The term "reciprocity association" and "confederation" are not commonly used to refer to trade agreements, and a free-trade area and customs union do not allow for the same level of integration as a common market.

An Agreement Among a Group of Countries to Eliminate Trade