What defines a common market?

A common market is characterized by allowing not only the free movement of goods and services, as seen in a customs union, but also the free movement of factors of production, such as labor and capital. This comprehensive integration enables countries involved to operate more cohesively, fostering higher levels of economic cooperation and efficiency.

In a common market, member countries remove trade barriers among themselves and adopt a common external tariff against non-member countries. This arrangement enhances economic collaboration, as businesses can operate seamlessly across borders, and workers can move freely to where their skills are needed most. This creates a large, more competitive market, promoting growth and development in the region.

The other options do not encapsulate the full essence of a common market. While a shared military strategy or labor regulations may benefit certain alliances, they are not foundational to the economic element that defines a common market. A trade agreement that excludes tariffs only describes some aspects of trade arrangements but does not encompass the essential movement of factors of production, which is crucial to the definition of a common market.