CUSTOMS UNION Meaning and
Definition
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A customs union refers to a formal agreement between multiple countries in which they promote economic integration by eliminating trade barriers and adopting a common external tariff on imports from non-member countries. In other words, it is a trade arrangement established among participating nations to facilitate the smooth flow of goods and services by reducing or eliminating customs duties, quotas, or other trade restrictions among themselves.
Under a customs union, member countries typically agree to uniform trade policies, allowing goods and services to be freely traded within the union without customs checks or tariffs. However, a common external tariff is employed to ensure a level playing field for trade with non-member countries. This means that all members apply the same tariff rates on imports from countries outside the customs union.
The primary objective of a customs union is to enhance economic cooperation and integration among member countries by boosting trade, stimulating investments, and encouraging economies of scale. By eliminating internal trade barriers, customs union members aim to create a unified market that offers greater opportunities for businesses to expand and compete more efficiently.
Customs unions are often considered as stepping stones towards deeper forms of economic integration, such as a common market or an economic union. Notable examples of customs unions include the European Union's Customs Union and the Southern African Customs Union (SACU).
Common Misspellings for CUSTOMS UNION
- xustoms union
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Etymology of CUSTOMS UNION
The term "customs union" can be broken down into two parts: "customs" and "union".
The word "customs" originated from the Latin word "consuetudo", which means "habit" or "practice". In the context of trade, it refers to the duties and taxes imposed on goods that are imported or exported between countries. The term evolved from Old French "custume" to Middle English "custumes" before becoming "customs" in modern English.
The word "union" comes from the Latin word "unio", meaning "oneness" or "unity". It refers to the act of joining together or forming a single entity.
When combined, "customs union" refers to an agreement between two or more countries to harmonize their customs policies and eliminate tariffs or trade barriers on goods traded among them.
Similar spelling words for CUSTOMS UNION
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