In European Union law, the Four Freedoms is a common term for a set of treaty provisions, secondary legislation and court decisions, protecting the ability of goods, services, capital, and labour to move freely within the internal market of the European Union. More precisely, they are:
The four freedoms are fundamental to the common market. Not only goods, but also factors of production can move freely between member states. The single market is conducive to increased competition, increased specialisation and larger economies of scale. Further, the common market allows goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources.
Article 12 of the EC Treaty prohibits discrimination on the basis of nationality and is one of its fundamental provisions. However, on its own it would not suffice to ensure free movement of factors of productions for the simple reason that not all barriers discriminate. For instance, a prohibition on discrimination would make illegal any measure in State A imposing a total ban or a quota on, say, toys from State B. But that provision would not prevent a measure that mandates that all toys sold in State B be packaged in recyclable material, even if such measure can in practice act as a ban or at least make the export of toys to State B more expensive. This difficulty has largely been eliminated in EU law through the concept known as “home country control”. According to this, a product or a service is allowed to access markets of other member states if it has lawfully been made/provided in the state of origin (Home State). Host State rules that present a barrier to this movement will be illegal unless justified by a set of specifically provided rules in the EC Treaty.
