The European Economic Community was the common market formed by a group of western European countries. Members dropped tariffs on one another’s goods and adopted shared rules for that trade. The community was later absorbed into the wider European union.
A parallel group, the European Free Trade Association (EFTA), was built by countries that wanted free trade among themselves without joining the community. Membership in one did not automatically mean membership in the other.
What Membership Required
- No internal tariff. Goods from one member entered another member without the old customs duty.
- A shared external approach. Members worked from a common policy toward countries outside the group.
- Institutions. A commission and a court applied the shared rules, rather than each capital interpreting them alone.
Common Market and Free-Trade Group
| Compared | The Community | The Free-Trade Group |
| Trade among members | A common market, with shared rules | Free trade among the members |
| Outside countries | A shared external policy | Each member kept its own external policy |
| Later history | Absorbed into the wider European union | Continued as a smaller association |