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This fact was correct when it was updated on 01 Jul 2021

What is frictionless trade?

In its purest sense, this refers to the removal of tariff and non-tariff barriers to trade, resulting in the free movement of goods, services, capital and people between countries, so that it is the same as such activity within a country. This encompasses not just the removal of taxes and charges at borders, but also alignment of regulatory and legal frameworks to ensure that the same rules apply throughout an economic area. In truth, no trading arrangements, even within the EU, remove all barriers to trade, but the EU single market is the most advanced free trade area in this respect, at least regarding internal trade between member states. In the UK, the term ‘frictionless trade’ is often used to refer only to the removal of most barriers in trade in goods.

Find out more – read our explainer on the difference between a free trade area and a customs union.

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