Commerce & marketsen
Customs union
A form of economic integration in which member countries eliminate customs duties between themselves and apply a common external tariff towards third countries.
Definition and principles
A customs union represents a level of economic integration beyond a free trade area. It combines two elements:
- Free movement of goods between members (no internal customs duties)
- A Common External Tariff (CET) applied uniformly to imports from third countries
The EU Customs Union
The EU customs union, established in 1968, is the most integrated in the world. It is governed by the Union Customs Code (UCC) — Regulation (EU) No 952/2013 — and covers all 27 Member States. It entails:
- An identical Common Customs Tariff (TARIC) across all states
- Harmonised customs procedures
- A common commercial policy (exclusive EU competence under Article 207 TFEU)
- No customs controls at internal borders
Other customs unions worldwide
- Turkey-EU Customs Union (partial, covering industrial products)
- Southern African Customs Union (SACU)
- Mercosur (imperfect customs union with exceptions)
- Eurasian Economic Union (EAEU)
Advantages and limitations
A customs union simplifies intra-zone trade (no rules of origin needed between members) but implies a loss of sovereignty over trade policy. Members cannot individually negotiate trade agreements with third countries.