Customs union

A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.

World trade
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Policy Import Export Balance of trade Trade law Trade pact Trade bloc Trade creation Trade diversion Export orientation Import substitution Trade finance Trade facilitation Trade route Domestic trade Tax
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History Mercantilism Protectionism Laissez-faire Free trade Economic nationalism Economic integration
Organizations International Monetary Fund International Trade Centre World Trade Organization World Customs Organization International Chamber of Commerce
Economic integration Preferential trading area Free-trade area Currency union Customs union Single market Economic union Fiscal union Customs and monetary union Economic and monetary union
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Customs unions are established through trade pacts where the participant countries set up common external trade policy (in some cases they use different import quotas). Common competition policy is also helpful to avoid competition deficiency.

Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries. It is the third stage of economic integration.

Every economic union, customs and monetary union and economic and monetary union includes a customs union.

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