BBC NEWS: Free trade area v single market – what’s the difference?

April 19, 2016 | By: Jonty Bloom

The UK economy could thrive outside the European Union, but may not form part of the single market, Leave campaign leader Michael Gove has said.

We would have a relationship of “free trade and friendly co-operation” with the EU, the Justice Secretary insisted on the Today Programme. He said that after Brexit the UK would be part of a European “free trade zone”, one that already exists from “Iceland to the Russian Border” but not part of the single market as we are at the moment. But what is the difference between a free trade area and a single market? A free trade area is one where there are no tariffs or taxes or quotas on goods and/or services from one country entering another. The negotiations to establish them can take years and there are normally exceptions. So agriculture and fisheries might be exempted, certain industries protected and some goods may not be covered. Also imported goods would have to comply with the law of the country they are being sold in. So, for example, you could have a free trade agreement with the USA but still a ban on the import of GM foods or different safety standards for electrical goods. There is a free trade zone in Europe and we helped to create it – it is called EFTA, the European Free Trade Area and consists of Norway, Iceland, Switzerland and Liechtenstein. The EU has free trade arrangements with many other countries in Europe and beyond, including Turkey (a customs union) and Ukraine and countries that are applying to join the EU. To read the full article, please click here.