Internal market

economic-dictionary

The internal market is one that is usually delimited in a country, region, locality, or even organization.

That is, although the domestic market is often used as a synonym for the domestic market, the former is a broader concept as it can refer to the domestic market of a city, district within a metropolis or even of an organization.

The internal market is characterized by being surrounded by a larger space with which goods and services can also be exchanged. For example, the domestic market of a country is surrounded by the rest of the world, where there are many more consumers and investors.

We can understand then that the internal market corresponds to all the transactions that take place in a certain geographic space or institution.

For example, we can refer to the internal market of Bogotá, the Roma neighborhood in Mexico City, or even the workers who live in a mining camp in the Andes.

Difference between internal and external market

The domestic market is characterized by being governed by the rules of the country or locality in question. That is, the Legislative Power of each nation will dictate, for example, the phytosanitary requirements that certain fruits or vegetables must meet to be marketed in their jurisdiction.

On the other hand, the external market is characterized by being subject to the commercial policy of each nation, and international agreements can be established.

For example, the North American Free Trade Agreement or the European Union itself represent integration agreements that reduce barriers to trade. In contrast, countries can set high tariffs (import taxes) or other barriers to the purchase of certain products or services from abroad.

It should be noted that the distinction between internal and external is only one way of classifying markets. These can be divided, in turn, for example, by economic activity such as textiles, pharmaceuticals, food and beverages, among others.

External market

Protectionism

Protectionism is a current of thought that gives priority to the internal market over the external market. Thus, if a new deposit of a natural resource is found, for example oil, it should first be used to supply domestic demand, according to this position.

Similarly, protectionism proposes to protect local producers, imposing trade barriers to goods and services from abroad, particularly those that compete with the local supply.

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