Customs Unions

A customs union is an agreement between countries to simplify trade between them. Member countries agree to eliminate tariffs (taxes on imports) on goods traded among themselves, making it cheaper and easier to do business. Additionally, they establish a common external tariff, meaning they apply the same tariff rates on goods coming from outside the union. This arrangement encourages trade among members, strengthens economic ties, and can enhance bargaining power in global trade. Examples include the European Union's customs policies among its member states.