Definition

Noun: A customs union is a formal agreement between two or more countries to eliminate tariffs and other trade barriers on goods moving between them, while also adopting a common external tariff on imports from countries outside the union. Its primary purpose is to facilitate free trade among member states and present a unified trade policy to the rest of the world.

Usage and Examples

• General Use:

  • The European Union began as a customs union before evolving into a more integrated economic and political bloc.
  • Forming a customs union can significantly boost trade between the participating nations.

• In Economic/Political Context:

  • The countries negotiated a customs union to strengthen their regional economy.
  • A key feature of a customs union is the common external tariff applied to all non-members.

Advanced Usage

• "to establish/form a customs union": The act of creating such an agreement.
  • The neighboring states agreed to form a customs union to promote economic integration.
• "within a customs union": Referring to the internal market created by the agreement.
  • Goods can move freely within the customs union without being subject to duties.

Variants and Related Words

• Common market: An advanced form of economic integration that includes a customs union and adds free movement of labor and capital.
• Free trade area: A less integrated agreement where countries remove tariffs among themselves but maintain their own external trade policies.
• Economic union: A deeper level of integration that includes a common market and harmonized economic policies.

Synonyms

• Trade bloc: A broad term for a group of countries united by trade agreements.
• Tariff union: A less common synonym emphasizing the common external tariff.

Related Phrases and Concepts

• Common external tariff (CET): The uniform tariff rate applied by all members of a customs union to imports from non-member countries. This is a defining characteristic.
• Trade liberalization: The general process of reducing trade barriers, which a customs union aims to achieve internally.

Noun

1. an association of nations to promote free trade within the union and set common tariffs for nations that are not members