Customs Union
Economic area in which goods circulate freely without customs duties and where a common external tariff applies to imports.
Customs Union
A customs union is an agreement between two or more countries which provides for the removal of customs duties and quantitative restrictions between members, and the application of a common customs tariff (CCT) towards third countries.
The EU customs union
The EU customs union, created in 1968, is the most successful in the world. It brings together the 27 Member States and constitutes the foundation of the single market. Its characteristics are the total absence of customs duties between Member States, a single Common Customs Tariff, a common commercial policy and a unified Union Customs Code (UCC).
Distinction with a free trade zone
In a free trade area (FTA), each member maintains its own customs tariff towards third countries (hence the need for rules of origin). In a customs union, the tariff is common, which eliminates the need to prove origin for free internal movement.
Other customs unions
UEMOA (8 West African countries), CEMAC (6 Central African countries), EACU (East African Community), Mercosur (partially), EU-Turkey customs union (industrial products), EU-Andorra customs union and EU-San Marino.
Importance
The customs union is one of the founding pillars of the EU. Understanding it is essential to understand the concepts of Union/non-Union goods, release for free circulation and internal transit.