Question on: WAEC Economics - 2016
When a number of countries agree to remove all trade barriers among themselves and at the same time charge a common tariff against non member countries, it known as
A
free trade area
B
common market
C
custom union
D
economic community
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Correct Option: C
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. 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).
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