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News Navigator: What is the EU single market?

The Mainichi Shimbun answers some common questions readers may have about the European Union (EU) single market.

Question: What does the term "single market," which is used in reference to the United Kingdom (UK)'s decision to leave the EU, mean exactly?

Answer: The EU single market refers to the free movement of labor, goods, services and capital between the 28 EU member states. As a result, the entire EU region -- which has a population of approximately 500 million people and a total area of about 4.29 million square kilometers (about 11 times that of Japan) -- is a unified market in which tariffs are not placed on exports, across the region.

Q: How would the UK's withdrawal from the EU affect the British economy?

A: Approximately half of Britain's foreign trade is with EU countries. Therefore, if trade tariffs between the EU and the UK were to be implemented, following the UK's withdrawal from the single market, then the UK economy would suffer as a result. Furthermore, there is a chance that Non-British banks that currently have offices in the City of London -- making use of the EU's "single passport" system that allows companies to operate in another EU country -- might decide to relocate away from the UK, along with other non-British companies in other industries.

Q: Why is the UK leaving the EU?

A: In a referendum held in the UK in June 2016, the majority of British people (52 percent) voted to leave the EU, partly as a reaction against the flow of immigrants coming into the UK. Prior to the referendum, however, the UK had been somewhat distant from the EU -- which is exemplified by the country's decision to continue using its own currency, instead of the common currency used in EU countries, the Euro. Furthermore, it is thought that some British people voted to leave the EU as they were against the notion of restricted sovereignty, that was due to factors such as EU regulations. (Answers by Atsushi Iwasa, Foreign News Department)

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