The European single market

Danni has ordered a winter coat online. Are you upset that you have to pay a fee to get your package? Well, your package is from the USA. You’ve imported the clothes. So you have to pay a fee when the package crosses a border, a customs tariff.

That t-shirt you’ve got on? No, you didn’t need to pay a tariff for that. That’s because it was sent from one country in the European Union, the EU, to another EU country. And the EU has an arrangement where people can trade freely between EU countries, without having to pay tariffs. The EU is a trading bloc.

This particular type of trading bloc is called a single market. So, this is the European Single Market. When the EU was first being formed, after the Second World War, there were two important goals: The first was to safeguard peace in Europe, and the other was to simplify trade between the European countries. Thanks to the single market, companies can sell products and services in all the EU countries without having to pay any fees or tariffs. Products become cheaper for EU-citizens, and companies get more customers.

There are four main rules in the single market, they are called the four freedoms. The first freedom deals with things that are transported across borders within the EU, like your t-shirt or a car for instance. These things, that you can take hold of, are called goods. And there are no tariffs or fees to transport goods within the EU. But there is one exception: if a country thinks that a particular product is dangerous to the environment or to people’s health or safety, then the country can stop the goods from entering.

This can be for instance alcohol, tobacco, or weapons. The second freedom has to do with services. Services are things that you pay for that aren’t goods. Like getting a haircut at the hairdressers, or repairs for your moped from a mechanic. Thanks to this freedom, a company in one EU country can sell their services in all the EU countries without having to pay fees.

The third freedom has to do with money, or capital. EU citizens and companies can send money or pay for things throughout the EU without any hindrance. The fourth freedom is the freedom of movement for persons. This means that all EU citizens have the right to travel to, and to live in another EU country for work or study. So if you want to move to a warmer country, Danni, then you can, thanks to the freedom of movement.

But there are some restrictions: you have to be able to pay for yourself, to support yourself. And to live in some EU countries you also need health insurance. These rules don’t just apply within the EU. There are three European countries that aren’t part of the EU but are still part of the single market. They are Norway, Iceland, And Liechtenstein.

So the four freedoms are valid there as well. But for this package, Danni, you do in fact have to pay tariffs.